Operating Risk Is

question 13

Multiple Choice

Operating risk is:

• A)the risk of loss resulting from inadequate or failed internal processes, people and systems, or external events
• B)the chance of loss arising from movements in market variables
• C)the possibility of an ADI being unable to meet its financial obligations as they fall due
• D)the risk of a borrower defaulting on their scheduled loan payments
• E)the risk that an ADI cannot maintain sufficient funds to cover its loans.

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Definitions:

Hypothesis

A theory about how key variables relate.

Scientific Method

A systematic and empirical approach to research in which a question is identified, relevant data is gathered, a hypothesis is formulated, and the hypothesis is empirically tested.

Economic Variables

Key factors or indicators that reflect the economic performance or position of an economy, such as GDP, inflation, and unemployment rate.

Theoretical Predictions

Assumptions or forecasts based on existing theories or models about how certain conditions will influence outcomes in specific scenarios.