GARP Financial Risk and Regulation (FRR) Series 2016-FRR Question # 113 Topic 12 Discussion

GARP Financial Risk and Regulation (FRR) Series 2016-FRR Question # 113 Topic 12 Discussion

2016-FRR Exam Topic 12 Question 113 Discussion:
Question #: 113
Topic #: 12

A financial analyst is trying to distinguish credit risk from market risk. A $100 loan collateralized with $200 in stock has limited ___, but an uncollateralized obligation issued by a large bank to pay an amount linked to the long-term performance of the Nikkei 225 Index that measures the performance of the leading Japanese stocks on the Tokyo Stock Exchange likely has more ___ than ___.


A.

Legal risk; market risk; credit risk


B.

Market risk; market risk; credit risk


C.

Market risk; credit risk; market risk


D.

Credit risk, legal risk; market risk


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