Operational Risk Is

question 9

Multiple Choice

Operational risk is:

• A) the risk to a firm's financial condition resulting from adverse movements in the level or volatility of market prices
• B) the risk that a counterparty will fail to perform on an obligation
• C) the risk that a firm may not be able to,or cannot easily,unwind or offset an asset or liability position at or near the previous market price because of inadequate market depth or because of disruptions in the marketplace
• D) the risk that deficiencies in information systems or internal controls will result in an unexpected loss
• E) the risk that a firm will become insolvent

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Definitions:

Direct Labour-Hours

The total hours worked by employees directly involved in the production of goods or provision of services.

Manufacturing Overhead

Broad category of indirect production costs that are not directly tied to specific physical units produced, including maintenance, utilities, and rent.

DLH

A measurement representing the total hours contributed by workers directly involved in the manufacturing process.

Production Budget

An estimation of the cost and resources needed for the production of goods within a specified period.