Financial Risk Management in Corporations Quiz
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Questions and Answers

What are the two classifications of market risk mentioned in the text?

  • Operational risk and credit risk
  • Credit risk and settlement risk
  • Sovereign risk and volatility risk
  • Directional risk and non-directional risk (correct)
  • What type of risk arises when one fails to fulfill their obligations towards their counterparties?

  • Credit risk (correct)
  • Settlement risk
  • Operational risk
  • Market risk
  • What is the cause of non-directional risk in market risk?

  • Movement in stock price
  • Volatility risks (correct)
  • Interest rates
  • Operational inefficiency
  • What is the classification of credit risk that usually arises due to difficult foreign exchange policies?

    <p>Sovereign risk</p> Signup and view all the answers

    What are the sources of financial loss mentioned in the text?

    <p>Operational inefficiency, inability to collect receivables, and inability to perform specific transactions due to lack of cash</p> Signup and view all the answers

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