n NISM Certifications
VII NISM Series VII
Medium

Operational risk is the risk of monetary loss resulting from inadequate _________ .

Practice question from NISM Series VII Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Internal processes

  2. B

    Manual and systems error

  3. C

    External events

  4. All of the above

    Correct answer

Why this is the answer

Operational risk arises from failed internal processes, system/manual errors, or external events. For stock brokers, this includes risks like mishandling client assets, trading errors, regulatory non-compliance, non-payment for trades, and sudden bank closures.

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