Financial Risk Manager Part 1
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A professor is preparing a lecture on different types of risks that the banks face as part of a financial career seminar for undergraduate college students. The lecture is meant to show the multitude of existing risks and the importance of understanding and controlling those risks, to promote choosing a profession in financial risk management. Which of the definitions below should be excluded from the lecture?
A
Credit risk is the risk of default on a debt that may arise from a borrower failing to make required payments.
B
Market risk is the risk of losses in positions arising from movements in market variables.
C
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events.
D
Strategic risk is a subcategory of Operational risk which involves adopting an inadequate or inappropriate product mix strategy causing loss.