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
    E Interest 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.

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