CISI Operational Risk Practice Questions - CISI Operational Risk (Investment Operations Certificate Unit) Exam

Operational risk is often described as which type of risk in relation to potential reward?

A speculative risk offering balanced upside and downside A market risk that can be hedged with derivatives A pure (downside-only) risk with no upside reward A diversifiable risk that disappears in a large portfolio

Correct Answer:

A pure (downside-only) risk with no upside reward

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