Quiz on Risk Profile of Islamic Financial Institutions

What are the two broad categories of risk mentioned in the text?

• Shariah and Non-Shariah Risks

• Systematic and Unsystematic Risks

• Credit and Market Risks

• Operational and Liquidity Risks

Which type of risk is inherent to the entire market?

• Unsystematic Risk

• Systematic Risk

• Operational Risk

• Credit Risk

What is the potential loss when a counterparty fails to meet its obligations called?

• Market Risk

• Credit Risk

• Liquidity Risk

• Operational Risk

Which risk cannot be mitigated through diversification?

• Unsystematic Risk

• Liquidity Risk

• Credit Risk

• Systematic Risk

What is the potential impact of adverse price movements in financial markets known as?

• Liquidity Risk

• Operational Risk

• Market Risk

• Credit Risk

What type of risk arises from inadequate or failed internal processes?

• Liquidity Risk

• Operational Risk

• Market Risk

• Credit Risk

What is the risk called that arises from a bank's inability to meet its obligations?

• Operational Risk

• Liquidity Risk

• Credit Risk

• Market Risk

What is the term for the potential financial loss from a counterparty's failure to meet obligations?

• Operational Risk

• Market Risk

• Counterparty Risk

• Credit Exposure

Which of the following is a unique risk faced by Islamic banks?

• Credit Risk

• Shariah Non-Compliance Risk

• Market Risk

• Liquidity Risk

What type of risk arises from unexpected changes in the rate of returns?

• Shariah Non-Compliance Risk

• Rate of Return Risk

• Equity Investment Risk

• Liquidity Risk