Question
When a bank chooses the wrong strategy or follow a
long-term business strategy which might lead to its failure, it is calledSolution
Business risk is the risk that a bank's long-term business strategy might lead to its failure. This can happen due to a number of factors, such as: · Choosing the wrong markets to operate in. Not adapting to changing market conditions Failing to innovate Making bad investments Being unable to compete with other banks Business risk is a major risk for banks, and it is important for banks to have a strong risk management framework in place to mitigate this risk
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