Topic 6 Financial Disasters.pdf

Matching trades with a clients needs and providing

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matching trades with a client's needs and providing price quotes that are independent from the front office. investigating large profits from unknown trading strategies. developing more accurate methods for computing collateral when borrowing bonds. incorporating liquidity risk into risk models. All of the following are reasons that Nick Leeson engaged in aggressive speculative trading in the Barings Bank collapse except: his authority over settlement operations allowed him to hide trading losses. Barings' risk management models were flawed. he was attempting to recover previous trading losses. Barings' lack of risk management oversight. Which of the following choices is an example of operational risk in the collapse of Barings? Failure to supervise the actions of its trader. Much of a company's assets were in illiquid derivative products. The Nikkei collapsed due to an earthquake. The default of Japanese industrial firms. Between 1997 and 2002, a currency trader for Allied Irish Bank (AIB), John Rusnak, hid $691 million in losses from management. Rusnak used a number of deceptive means to hide these losses including: I. bullying back-office workers into not following-up on trade confirmations for imaginary trades. II. reporting substantial fake gains from small currency arbitrage positions.
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A) B) C) D) Question #11 of 15 Question ID: 438676 A) B) C) D) Question #12 of 15 Question ID: 438677 A) B) C) D) Question #13 of 15 Question ID: 438691 A) B) C) D) I only.
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