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    Question

       When a bank chooses the wrong strategy or follow a long-term business strategy which might lead to its failure, it is called

    A Credit risk Correct Answer Incorrect Answer
    B Operational risk Correct Answer Incorrect Answer
    C Market risk Correct Answer Incorrect Answer
    D Business risk Correct Answer Incorrect Answer

    Solution

    Business risk is the risk that a bank's long-term business strategy might lead to its failure. This can happen due to a number of factors, such as: ·      Choosing the wrong markets to operate in. Not adapting to changing market conditions Failing to innovate Making bad investments Being unable to compete with other banks Business risk is a major risk for banks, and it is important for banks to have a strong risk management framework in place to mitigate this risk

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