WorksheetsTypes of Business Risk
Total questions: 20
Worksheet time: 7mins
Market risk refers to the fact that
market prices are continually in a state of change.
market rates are continually in a state of change.
market prices and rates are continually in a state of change.
market sentiments are continually in a state of change.
If market interest rates rise, the value of bonds will
be significant
be equal to zero
increase
decrease
Equity price risk refers to
the volatility of currencies prices
the volatility of market prices
the volatility of stock prices
the volatility of oil prices
general market risk and specific risk are two components of
Foreign exchange risk
Equity price risk
Commodity price risk
Credit Risk
General market risk _______ be diversified away, while specific risk ________be mitigated
cannot______ can
can ______cannot
cannot______ cannot
can ______can
Commodity price risk refers to the price volatility of
Stocks, bonds, and securities
Com services
currencies
precious metals, base metals, agricultural products, energy
The lack of trading liquidity tends to ___________the amount of price volatility
decrease
increase
compensate
deteriorate
a loss suffered by a party whereby the counterparty fails to meet its contractual obligations is a
Business and Strategic Risk
Liquidity risk
Credit Risk
Legal and Regulatory Risk
The potential nonpayment of interest and/or principal on a loan by the borrower is a
Business and Strategic Risk
Liquidity risk
Reputation risk
Default risk
The chance that a counterparty will stop operating completely is a
Business and Strategic Risk
Bankruptcy risk
Reputation risk
Default risk
The possibility that the credit rating of a bond or other debt instrument may be lowered by a credit rating agency, leading to a decrease in the bond's value is a
Business and Strategic Risk
Bankruptcy risk
Downgrade risk
Default risk
also known as delivery risk or counterparty risk is a
Settlement risk
Bankruptcy risk
Downgrade risk
Default risk
the possibility that a firm may not be able to meet its short-term financial obligations due to difficulties in obtaining funding in the market is a
Settlement risk
Bankruptcy risk
Downgrade risk
Funding liquidity risk
the possibility that an investor may not be able to buy or sell an asset quickly enough or at a fair price due to a lack of market participants or market conditions is a
Settlement risk
Bankruptcy risk
Market liquidity risk
Funding liquidity risk
refers to potential losses flowing from inadequate (or failed) internal processes, human error, or an external event is a
Settlement risk
Bankruptcy risk
Market liquidity risk
Operational risk
the potential for litigation to create uncertainty for a firm is a
Legal risk
Regulatory Risk
Market liquidity risk
Operational risk
involves the uncertainty stemming from actions taken by governmental entities, which can significantly impact businesses or financial transactions, is a
Legal risk
Regulatory Risk
Market liquidity risk
Operational risk
refers to variability in inputs that influence either revenues
(e.g., customer demand trends, product pricing policies, etc.) or cost structures, is a
Legal risk
Regulatory Risk
Business risk
Operational risk
involves long-term decision making about fundamental business strategy, is a
Strategic risk
Regulatory Risk
Business risk
Operational risk
the danger that a firm will suffer a loss in public perception , is a
Strategic risk
Reputation risk
Business risk
Operational risk
