Across
- 4. Systematic (undiversifiable) risk reflecting the co-movement of the returns on a specific stock with returns on the market portfolio
- 6. Evaluation It is a Market Risk Measurement that considers the return-risk ratio of traders, which may allow a more rational bonus (compensation) system to be put in place
- 8. Risk The risk that repayments from foreign borrowers may be interrupted because of interference from foreign governments.
- 10. (Back Simulation) Approach It is a major criticism of Risk Metrics is the need to assume a symmetric normal distribution of all asset returns.
- 13. Bonds Are uncollateralized and their price or value reflects the credit risk rating of the country issuing the bonds.
- 14. Risk Factor Approach It is an approach applies risk weights to the market values of trading portfolio securities with enhancements to prudently reflect hedging of and diversification across securities.
Down
- 1. Risk Is the risk of loss resulting from inadequate or failed processes or systems or due to external events that are neither market nor credit-related
- 2. of Scale Increase in the average costs of production as the output of an FI increases.
- 3. Loan Market segment that are normally traded at very deep discounts from 100 percent.
- 5. Repudiation Formal deferment of debt-service payments and the application of new and extended maturities to the deferred amount.
- 7. of Scope The ability of FIs to generate synergistic cost savings through joint use of inputs in producing multiple products.
- 9. Risk It can be largely diversified away, leaving behind systematic (undiversifiable) market risk.
- 11. Avoidance The development of international wire networks as well as international financial service firm networks has enabled FIs to shift funds and profits by using internal pricing mechanisms.
- 12. Rescheduling Refers to the formal deferment of debt-service payments and the application of new and extended maturities to the deferred amount.