CCAR Seven Principles Exam Questions With
100% Verified Correct Answers.
compliance
The Risk of fines or sanctions or of financial damage or loss due to the failure to comply with
laws, rules, regulations, and regulatory expectations.
credit risk (retail/wholesale)
The Risk of loss arising from the default by the borrower or counterparty such that an
obligation (e.g., loan, bond or lease) will not be repaid on time and/or in full or the client and/or
counterparty will fail to perform on an obligation to the institution (e.g. trade, OTC derivative
contract).
legal risk
The Risk of loss or imposition of damages, fines, penalties or other liability arising from failure
to comply with a contractual obligation or to comply with laws or regulations to which the firm
is subject. As defined by ASC 450 ( Also known as FAS 5).
liquidity risk
The Risk of unacceptable losses and/or costs arising from an institution's failure to meet its
obligations as they come due because of an inability to liquidate assets or obtain adequate
funding.
market risk
The Risk of loss arising from the potential adverse changes in the value of the firm's assets and
liabilities resulting from changes in the structural composition of the balance sheet or market
variables such as interest rates, foreign exchange rates, equity prices, commodity prices, or
credit spreads.
operational risk
, The Risk of loss resulting from inadequate or failed processes or systems due to internal or
external events, people, or fraud.
reputational risk
The Risk that an action, transaction, investment or event will reduce the trust that clients,
shareholders, employees or the broader public has in the Bank's integrity or competence.
strategic risk
The Risk of loss resulting from adverse business decisions or improper implementation of the
decisions.
human resource risk
Risk of loss due to the inability to maintain or recruit a productive and competitive workforce,
manage succession planning or failure to comply with compensation regulations.
tax risk
Risk of loss due to changes in tax law or interpretation, some action which results in
unfavorable tax treatment.
regulatory risk
Risk of loss due to actions taken against the industry, or the Bank specifically, by a large
regulatory body. These action may be expected or unexpected. Regulatory bodies include the
SEC, FRB, FDIC, NASD, HUD, DOJ Consumer Financial Protection Bureau, etc.
financial reporting risk
The risk of unreliable or misleading financial reporting and disclosures, including to the SEC,
FDIC, (e.g., The Consolidated Report of Condition and Income, "Call Report"), Federal Financial
Institutions Examination Council (FFIEC) and other external reporting.
anti trust risk
100% Verified Correct Answers.
compliance
The Risk of fines or sanctions or of financial damage or loss due to the failure to comply with
laws, rules, regulations, and regulatory expectations.
credit risk (retail/wholesale)
The Risk of loss arising from the default by the borrower or counterparty such that an
obligation (e.g., loan, bond or lease) will not be repaid on time and/or in full or the client and/or
counterparty will fail to perform on an obligation to the institution (e.g. trade, OTC derivative
contract).
legal risk
The Risk of loss or imposition of damages, fines, penalties or other liability arising from failure
to comply with a contractual obligation or to comply with laws or regulations to which the firm
is subject. As defined by ASC 450 ( Also known as FAS 5).
liquidity risk
The Risk of unacceptable losses and/or costs arising from an institution's failure to meet its
obligations as they come due because of an inability to liquidate assets or obtain adequate
funding.
market risk
The Risk of loss arising from the potential adverse changes in the value of the firm's assets and
liabilities resulting from changes in the structural composition of the balance sheet or market
variables such as interest rates, foreign exchange rates, equity prices, commodity prices, or
credit spreads.
operational risk
, The Risk of loss resulting from inadequate or failed processes or systems due to internal or
external events, people, or fraud.
reputational risk
The Risk that an action, transaction, investment or event will reduce the trust that clients,
shareholders, employees or the broader public has in the Bank's integrity or competence.
strategic risk
The Risk of loss resulting from adverse business decisions or improper implementation of the
decisions.
human resource risk
Risk of loss due to the inability to maintain or recruit a productive and competitive workforce,
manage succession planning or failure to comply with compensation regulations.
tax risk
Risk of loss due to changes in tax law or interpretation, some action which results in
unfavorable tax treatment.
regulatory risk
Risk of loss due to actions taken against the industry, or the Bank specifically, by a large
regulatory body. These action may be expected or unexpected. Regulatory bodies include the
SEC, FRB, FDIC, NASD, HUD, DOJ Consumer Financial Protection Bureau, etc.
financial reporting risk
The risk of unreliable or misleading financial reporting and disclosures, including to the SEC,
FDIC, (e.g., The Consolidated Report of Condition and Income, "Call Report"), Federal Financial
Institutions Examination Council (FFIEC) and other external reporting.
anti trust risk
