
Explanation:
The risk of facing a collision with regulatory bodies like the FDA due to ethical issues and human safety violations falls under legal and regulatory risk. This involves the potential for lawsuits, penalties, or restrictions imposed by a regulatory body.
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Q.81 The risk manager of a certain public company is in the process of appraising several projects before giving recommendations to shareholders. He realizes that a few projects may put the company on a collision course with the Food and Drug administration because of ethical issues and human safety violations. Under such circumstances, which major type of risk is the company facing?
A
Operational risk.
B
Credit risk.
C
Legal and regulatory risk.
D
Strategic risk.
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