Hi David,
Could you take a look this one? I feel Treasury management is more like cash management so should have less trading and so market risk than investment banking which btw I do not think involves a lot of "bad loan"...
thanks
23. Which of the following divisions of a large multi-national bank would typically have the
highest market risk?
a. Investment banking
b. Treasury management
c. Private banking
d. Retail brokerage
CORRECT: B
Treasury management faces high market risk since any unfavorable market movement is
absorbed directly by the company.
Reference: Anthony Saunders, Financial Institutions Management, 5th ed. Chapter 10.
INCORRECT: A
Investment banking is primarily exposed to credit risk of default, such as a bad loan.
Could you take a look this one? I feel Treasury management is more like cash management so should have less trading and so market risk than investment banking which btw I do not think involves a lot of "bad loan"...
thanks
23. Which of the following divisions of a large multi-national bank would typically have the
highest market risk?
a. Investment banking
b. Treasury management
c. Private banking
d. Retail brokerage
CORRECT: B
Treasury management faces high market risk since any unfavorable market movement is
absorbed directly by the company.
Reference: Anthony Saunders, Financial Institutions Management, 5th ed. Chapter 10.
INCORRECT: A
Investment banking is primarily exposed to credit risk of default, such as a bad loan.
