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13. The risk manager of a certain public company is in the process of appraising several projects before giving recommendations to shareholders. He realizes that a few projects may put the company on a collision course with the Food and Drug administration because of ethical issues and human safety violations. Under such circumstances, which major type of risk is the company facing? A. Operational risk B. Reputation risk C. Legal and regulatory risk D. Strategic risk 14. Distinguish between systemic and specific risks. A. Systemic risk refers to the risks borne by the entire economy as a whole, while specific risks are borne by a particular company or line of business. B. Systemic risks are risks borne by a single entity while specific risks are borne by the economy as a whole. C. Systemic risks are quantifiable while specific risks are non-quantifiable. D. Systemic risk can be minimized with diversification. 15. At the center of every financial institution's focus lies the need to instill confidence in all stakeholders including customers, lenders, shareholders and others. Each party should feel that its interests are safeguarded. Which type of risk do companies face in this regard? A. Legal and regulatory risk B. Reputation risk C. Specific risk D. Operational risk 16. During a job interview for the position risk analyst, Lee Yung was asked to define the risk management process in two points. Having an intermediate knowledge of risk management, Lee Yung mentioned following points: I. The risk management process starts with the very first step of identifying the correct risk. II. The last step of risk management process is to develop a risk mitigation strategy. Identify which of the abovementioned point(s) is/are correct? A. Point I B. Point II C. Both I and II D. None of the above