7-97 the BIS Definition: "The Risk of Loss Resulting from Inadequate

question 57

Multiple Choice

7-97 The BIS definition: "the risk of loss resulting from inadequate or failed internal processes,people,and systems or from external events," encompasses which of the following risks?

• A)Credit risk and liquidity risk
• B)Operational risk and technology risk
• C)Credit risk and market risk
• D)Technology risk and liquidity risk
• E)Sovereign risk and credit risk

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Definitions:

Effective Annual Rate

The interest rate on a loan or financial product restated from a nominal rate to an annual rate, taking compounding into account.

Compounded Daily

The process where interest is calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan, on a daily basis.

Compounded Semi-Annually

Interest calculated twice a year on the initial principal and the interest that has been previously accumulated.

Annual Percentage Rate

Annual Percentage Rate (APR) is the annualized interest rate charged to borrowers or earned by investors, including any fees or additional costs associated with the transaction.