question 1

you have just been promoted CRO of a diversified manufacturing company that has never practiced any form of risk management. who do u have to convince of its importance first?

a.) line manager

b.) credit managers

c.) operational management

d.) board members

e.) staff employees

question 2

between 1980-1983 continental illinois, a large mid western bank had its assets with maturities over a year totaled between 7 and 8 billion where as it liabilities with maturities over a year were between 1.5 and 2.5 billion. while considered "too big to fail " by many at the time the FDIC let them fail in 1984.

what risk did the bank face during 1980-83?

1.) credit risk

2.) market risk

3.) operational risk

4.) credit and operational

5.) market and operational

6.) market and credit risk

Summary Balance Sheet for DSM Bank at end of 2017 (5 millions) Cash Marketable Securities Loans Fixed Assets Total 5 10 80 5 100 Llabilities & Net Worth Deposits 90 Subordinated long term debt 5 Equity Capital 3 Total 100 Summary Income Statement for DSM Bank at end of 2017 (5 millions) Net interest income 3.00 Loan Losses (0.80) Noninterest income 90 Noninterest expense (2.50) Pre-tax operating income DSM Bank is a Canadian full service bank. A rouge trader working in DSM's New York office loses $7 million trading foreign exchange. What do you think will happen to the bank? They capitalize the loss No Impact, they write it off They become insolvent and go out of business