Operating risk specifically refers to the risk of loss resulting from inadequate or failed internal processes, people and systems, or external events. Options B-D relate to other types of risks - market risk, credit risk, and liquidity risk, respectively. Option E refers specifically to liquidity risk, which is related but slightly different from operating risk.

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Operating Risk Is

Question 45

Multiple Choice

Operating risk is:

A) the risk of loss resulting from inadequate or failed internal processes, people and systems, or external events
B) the chance of loss arising from movements in market variables
C) the possibility of an ADI being unable to meet its financial obligations as they fall due
D) the risk of a borrower defaulting on their scheduled loan payments
E) the risk that an ADI cannot maintain sufficient funds to cover its loans.

Correct Answer: