What type of risk would describe the failure of a back office to make adequate margin calls on repo positions?
A) Credit risk
B) Market risk
C) Operational risk
D) Settlement risk

Question

Quizplus · Accepted Answer

This scenario describes an operational risk, specifically a failure in the operational processes and procedures for margin calls on repo positions. Credit risk refers to the risk of borrowers defaulting on loans or other obligations, market risk refers to the risk of losses due to changes in market prices, and settlement risk refers to the risk of a counterparty failing to deliver securities or cash as expected during a settlement transaction.

What Type of Risk Would Describe the Failure of a Back