Question

When a bank chooses the wrong strategy or follow a long-term business strategy which might lead to its failure, it is called

A Credit risk Correct Answer Incorrect Answer
B Operational risk Correct Answer Incorrect Answer
C Market risk Correct Answer Incorrect Answer
D Business risk Correct Answer Incorrect Answer

Solution

When a bank chooses the wrong strategy or follows a long-term business strategy that may lead to its failure, it is called "Business Risk." Business risk refers to the possibility that a bank's earnings or financial position may be negatively impacted by factors that are inherent in the bank's business operations. It is a broad category of risk that includes strategic risk, reputational risk, and other risks that arise from the bank's business activities.  

Practice Next

Relevant for Exams:

×
×