Identify the risks described in each statement: 1st: Dependent on the covenants set and agreed in between the lenders and the borrowers. 2nd: Classified as a systematic risk because it arises from external forces or based on the movement of the industry. a. Legal; Market b. Market; Legal c. Contractual; Industry d. Industry; Contractual

Identify the risks described in each statement: 1st: Dependent on the covenants set and agreed in between the lenders and the borrowers. 2nd: Classified as a systematic risk because it arises from external forces or based on the movement of the industry. a. Legal; Market b. Market; Legal c. Contractual; Industry d. Industry; Contractual

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter2: Introduction To Financial Statements

Section: Chapter Questions

Problem 6Q: Explain the difference between current and noncurrent assets and liabilities. Why is this...

See similar textbooks

Similar questions

How the following risk can be mitigated and managed 1. Market risk 2. Liquidity risk 3. Insolvency risk 4. Credit risk
1. The significant risk that is transferred from the policyholder to the issuer of an insurance contract is:a. Lapse or persistency riskb. Financial riskc. Expense riskd. Insurance risk2. Under the general model of PFRS 17, a group of insurance contracts is initially measured at:a. The fulfillment cash flowsb. The contractual service marginc. Either a or bd. Both a and b3. A group of insurance contracts is subsequently measured at:a. The liability for remaining coverageb. The liability for incurred claimsc. Either a or bd. Both a and b4. According to PFRS 17, an insurance contract is NOT derecognized when:a. Expiredb. Terms have been modified, and the modification is not substantivec. Terms have been modified, and the modification is substantived. Extinguished5. According to PFRS 17, an accounting service result is recognized in:a. Profit or lossb. Other comprehensive incomec. Statement of financial positiond. Partly in profit or loss, and partly in other comprehensive incomeUse the…
14 Risk related to counterparty failure to meet their obligation based on the initially agreed terms is referred to as:* A. Operational risk B. Funding risk C. Credit risk D. Fiduciary risk
Which of the following risks cannot be hedged?A. CreditB. LiquidityC. CurrencyD. Duration
The risk of an accounting loss from a financial instrument due to possible failure of another party to perform according to terms of the contract is known as: [A] Credit risk [B] Investment risk [C]Market risk [D]Opportunity risk.
A risk-based deposit insurance program is defined as: a. A program that assesses the concentration risks of insured deposits. b. A program that assesses fines on the basis of capital adequacy and supervisory judgments. c. A program that uses market risk as the basis for deposit insurance premiums. d. A program that assesses insurance premiums on the basis of capital adequacy and supervisory judgments.
Any risk involved a situation where there is a possibility of gain refers to: a. Liability risk b. Speculative risk c. Pure risk d. Personal risk
Fair value is used to value which of the following balance sheet accounts? a. Prepaid expenses; patents; property, plant, and equipment b. Capital lease obligations, bonds payable c. Receivables net of allowance for doubtful accounts d. Debtsecurities available for sale, trading securities
5) Systemic risk is a) credit risk. b) an insurance contract against the default of one or more borrowers. c) firm-specific risk. d) default risk. e) the potential breakdown of the financial system when problems in one market spill over and disrupt others.
Counterparty credit risk is a function of the probability of default, exposure at default, and loss given default. Assuming that the individual exposure at default with a counterparty is fixed, which of the following statements is correct? A. The probability of default can be mitigated by collateral, and exposure at default can be mitigated by netting. B. The probability of default can be mitigated by netting, and exposure at default can be mitigated by collateral. C. Loss given default can be mitigated by collateral, and exposure at default can be mitigated by netting. D. Loss given default can be mitigated by netting, and exposure at default can be mitigated by collateral.
Liabilities in the statement of affairs are classified into a. Unsecured liabilities with priority b. Fully secured creditors c. Partially secured creditors d. Unsecured liabilities without priority e. All of these
1. (a) “Insurance is a method of reducing risk”. Justify the statement. Briefly discuss the various method of eliminating business risk. (b) What do you mean by assignment in the context of insurance? Does assignment applicable in various main branches of insurance? (c) Compare and contrast between  Perils VS Hazards  Facultative reinsurance VS Treaty reinsurance