Question

Which of the following is an example of an operational risk for a company that manufactures automobiles?A. A state tax increase that makes buying and registering a car more expensive
B. Rising interest rates that affect the terms of car loans, thereby decreasing demand
C. Damage to completed cars held on a storage lot
D. A national car rental agency backing out of a contract to buy a certain volume of new cars
E. Jerome needs funding to help start a business selling school supplies. He uses a website that connects him directly with a lender who charges a below-market interest rate.

Answer 1

Answer:C. Damage to completed cars held on a storage lot

Explanation:

Operational risk are the hazards and the uncertainties that are faced by companies in the day to day activities. It may be caused as a result of system failure or manufacturing components.

An example of operational risk for a company that manufactures automobiles would be damage to completed cars held on a storage lot.