Operational Risk Sources Can Lead to the Following Costs for the FI

question 56

Multiple Choice

Operational risk sources can lead to the following costs for the FI:

• A)direct costs, indirect costs and opportunity costs
• B)direct costs and indirect costs only
• C)direct costs and opportunity costs only
• D)indirect costs and opportunity costs only

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Definitions:

Market Risk Premium

The supplementary income an investor aims to gain by investing in a market portfolio with risk rather than in secure, risk-free assets.

Beta

A measure of a stock's volatility in relation to the overall market, indicating how much a stock’s price might fluctuate.

Dividend Growth Rate

The dividend growth rate is the annualized percentage rate of growth that a particular stock's dividend undergoes over a period of time.

Annual Dividend

The total amount of dividend payments made to shareholders in a year, reflecting the company’s profitability and its distribution policy.