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    Question

    _________ is the risk of loss that arises due to

    breakdown in the internal procedures, people and systems or from external events
    A liquidity risk Correct Answer Incorrect Answer
    B interest rate risk Correct Answer Incorrect Answer
    C operational risk Correct Answer Incorrect Answer
    D credit risk Correct Answer Incorrect Answer
    E market risk Correct Answer Incorrect Answer

    Solution

    Operational Risk: Defined as per Basel committee as the risk of loss (direct loss) resulting from inadequate or failed internal processes, people and systems or from external events. The events under operational risk leading to losses could include: 1.    Internal fraud, 2.    External fraud, 3.    Employment practices and workplace safety, 4.    clients, products and business practices, 5.    Damage to physical assets, 6.    Business disruption and system failures, 7.    Execution, delivery and process management             

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