Question
6. Suppose that machinery used by Bank-Twenty for sorting and clearing checks breaks down. This is a manifestation of: A. Credit risk B. Insolvency risk
6. Suppose that machinery used by Bank-Twenty for sorting and clearing checks breaks down. This is a manifestation of:
A. Credit risk B. Insolvency risk C. Operational risk D. Liquidity risk E. Market risk
7. A U.S. bank, Stateside Bank, makes some cross-border loans denominated in the euro. Fluctuations in the dollar value of the euro will give rise to:
A. credit risk B. off-balance-sheet risk C. operational risk D. foreign exchange risk E. country risk
8. Which of the following would bring about off-balance-sheet risk for a financial institution?
A. A bank issues a letter of credit B. An insurance company buys some corporate bonds C. A credit union receives a savings deposit D. A pension fund invests in some common stock E. A bank makes a business loan
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