__________ Occurs When a Firm Does Not Have Adequate Controls

question 20

Multiple Choice

__________ occurs when a firm does not have adequate controls to monitor the employees responsible for its futures positions and those employees take more speculative positions than the firm desires.

• A)Credit risk
• B)Control risk
• C)Operational risk
• D)Management risk

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Definitions:

Integration Clause

A provision in a contract that declares it to be the complete and final agreement between the parties, superseding all prior discussions or agreements.

Statute of Frauds

A legal principle requiring certain types of contracts to be executed in writing and signed by all parties to be enforceable.

Real Estate

Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature.

Collateral

Assets pledged by a borrower to secure a loan or other credit, which can be seized by the lender if the borrower defaults.