Bank Supervision Risk Quiz

How many categories of risk has the OCC defined for bank supervision purposes?

• Five

• Seven

• Nine

• Twelve

Which of the following is NOT one of the categories of risk defined by the OCC?

• Credit Risk

• Operational Risk

• Interest Rate Risk

• Foreign Exchange Risk

What does credit risk in banking primarily arise from?

• The bank's inability to perform market transactions

• An obligor's failure to meet the terms of any contract with the bank

• Changes in the bank's management

• Fluctuations in the global economy

What is interest rate risk in banking related to?

• The risk of fraud and theft

• The risk to earnings or capital arising from movements in interest rates

• The risk associated with the bank's investment in technology

• The risk of changes in foreign exchange rates

Which type of risk is NOT part of market risk according to the document?

• Interest rate risk

• Price risk

• Liquidity risk

• Credit risk

What is liquidity risk in the context of banking?

• The risk associated with the bank's investment in foreign exchange markets.

• The risk to earnings or capital arising from a bank's inability to meet its obligations when they come due.

• The risk of changes in market factors such as interest rates and market liquidity.

• The risk associated with service or product delivery in a bank.

Which of the following is NOT a factor that complicates liquidity risk?

• Increased investment alternatives for retail depositors.

• Sophisticated off-balance sheet products.

• The credit sensitivity of banking customers.

• The stability of a country's government.

Price risk in banking is often interchangeable with which other type of risk?

• Liquidity risk.

• Credit risk.

• Market risk.

• Transaction risk.

Foreign exchange risk arises from changes in what?

• Service or product delivery.

• Foreign exchange rates.

• Internal controls and information systems.

• Banking regulations.

Transaction risk in banking is primarily due to problems with what?

• Market-making and position-taking in foreign currencies.

• Service or product delivery.

• Investment in off-balance sheet products.

• The credit sensitivity of banking customers.