Multiple choice

Which of the following situations represent(s) operational risk?

  1. Failure of computer system of loan hour

  2. Deficiency in execution of loan document

  3. Non-squaring of open position by the forex dealer

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Operational risk has been defined by the Basel Committee on Banking Supervision as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk, but excludes strategic and reputation risk.

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