Podcast
Questions and Answers
Which aspect does credit risk mainly refer to?
Which aspect does credit risk mainly refer to?
- Possibility of tax reliefs.
- Assistance in risk transfer.
- Facilitation of rapid recovery from risks.
- Failure of the counter-party to honor its side of the contract. (correct)
What is the main goal of financial risk management as described in the text?
What is the main goal of financial risk management as described in the text?
- Maximize costs associated with renegotiation of debt.
- Avoid restructuring of capital.
- Avoid loss of reputation in the financial markets. (correct)
- Minimize shareholders' wealth.
In financial risk management, what is the purpose of risk transference strategy?
In financial risk management, what is the purpose of risk transference strategy?
- Minimize risk exposure in figures.
- Turn losses into tax reliefs.
- Shift risk to another party. (correct)
- Assist in risk acceptance.
Which type of risk is considered the biggest risk that financial institutions take according to the text?
Which type of risk is considered the biggest risk that financial institutions take according to the text?
In what scenario does settlement risk occur?
In what scenario does settlement risk occur?
How does financial risk management aim to reduce costs associated with credit risk in derivative transactions?
How does financial risk management aim to reduce costs associated with credit risk in derivative transactions?
What is the primary focus of traditional credit (loans) risk compared to trading credit risk?
What is the primary focus of traditional credit (loans) risk compared to trading credit risk?
Why is credit risk considered a significant factor in financial institutions?
Why is credit risk considered a significant factor in financial institutions?
What is settlement risk related to in trading transactions?
What is settlement risk related to in trading transactions?
How does credit risk impact derivative transactions according to the text?
How does credit risk impact derivative transactions according to the text?
