Portfolio Management Q173

173Statement 1: Financial risk originates from activity in the financial markets. Non-financial risk originates from outside the financial markets.

Statement 2: Financial risk originates from the financial markets. Nonfinancial risk is the risk that is hard to quantify and includes the risks related to the environment at large.

Statement 3: Financial and non-financial risks both originate from financial markets.

Which statement(s) is/are correct?

Option : B
Explanation : Financial risk originates from the financial markets. Non-financial risk is the risk that is hard to quantify and includes the risks related actions within an entity or from external origins, such as the environment, the community, regulators, politicians, suppliers and customers.

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