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