WorksheetsInternational banking - Risk management
Total questions: 10
Worksheet time: 10mins
Name
Class
Date
1.
What type of risk that occurs from the failure of borrowers to make required payments on loans?
a)
Liquidity risk
b)
Credit risk
c)
Operational risk
d)
Market risk
2.
When bank’s image and public standing is in doubt and leads to public’s loss of confidence in a bank, it is called
a)
Reputational risk
b)
Market risk
c)
Operational risk
d)
Moral Hazard
3.
The Financial Stability Board's principles of risk management do NOT includes:
a)
An effective risk appetitive framework
b)
Risk appetitive statement
c)
Diversification porfolios
d)
Risk limits
4.
When there is a financial loss to bank arising from legal suits filed against the bank or by bank for wrongly applying regulation, it is called
a)
Systematic risk
b)
Equity risk
c)
Market risk
d)
Legal risk
5.
When the risk of losses in on- or off-balance sheet positions arise from movement in market prices, it is called
a)
Systematic risk
b)
Equity risk
c)
Market risk
d)
Legal risk
6.
According to Basel Accord II, the minimum capital ratio is
a)
9%
b)
8%
c)
7%
d)
6%
7.
The technique that relies on computer modeling of different scenarios and computation of the results of those scenarios on bank’s portfolio is
a)
Stress Testing
b)
Value at Risk (VaR)
c)
Altman's Z Score model
d)
The Standardised Approach
8.
Which one is an example of human risk?
a)
A teller accidentally gives an extra $50 bill to a customer
b)
Borrowers default on a principal or interest payment of a loan
c)
Computer hacking
d)
A large number of depositors withdraw their deposits at bank
9.
Counterparty risk is a type of credit risk that arising when a party in the contract loses the ability to fulfill the conditions stated in the credit contract.
a)
true
b)
false
10.
Market risk arises because of all of the following reasons EXCEPT
a)
Adverse changes in interest rates
b)
Adverse change in foreign exchange rates
c)
Terrorist attacks, tsunamis and earthquakes
100 %
