[Solved] Consider the following statements regarding banking risks: Statement 1: Market risk arises due to changes in interest rates. Statement 2:... Which of the above statements is/are correct? | Banking Awareness

Banking Awareness - Banking Acts, Reforms & Risk Management

Consider the following statements regarding banking risks: Statement 1: Market risk arises due to changes in interest rates. Statement 2: Market risk arises due to internal fraud. Which of the above statements is/are correct?

AOnly Statement 2 is correct

BBoth Statement 1 and Statement 2 are correct

CNeither Statement 1 nor Statement 2 is correct

DOnly Statement 1 is correct

Step-by-Step Solution

Step 1: Evaluate Statement 1
Market risk does arise due to changes in interest rates.
Step 2: Evaluate Statement 2
Internal fraud is classified as operational risk, not market risk.
Final Answer:
Only Statement 1 is correct → Option D
Quick Check:
Interest rate change = Market risk; Fraud = Operational risk ✅

Quick Trick: Fraud always points to operational risk.

Common Mistakes:

MISTAKES

Mixing operational risk events with market risk causes.

Master "Banking Acts, Reforms & Risk Management" in Banking Awareness

Start learning the concept with an interactive lesson.

Learn

More Banking Awareness Quizzes

Which of the above statements is/are correct?

Step 1: Evaluate Statement 1

Step 2: Evaluate Statement 2

Final Answer:

Quick Check:

Want More Practice?