Brian Smith,the CEO of Carter National Bank,anticipates that interest rates may fall in the future and as a result buys $100 million in 30 year Treasury Bonds for the bank's security portfolio.Instead,interest rates rise,causing the value of these bonds to fall.This would be an example of which of the following types of risk?

Question

Quizplus · Accepted Answer

This is an example of strategic risk as it relates to the bank's strategic decision to invest in 30 year Treasury Bonds based on a specific anticipation of interest rate movements. The outcome did not align with the bank's strategic objective, leading to a decline in the value of the investment.

Brian Smith,the CEO of Carter National Bank,anticipates That Interest Rates