[1] True or False? (20 points) (1) When an asset manager is also the custodian o

Question

[1] True or False? (20 points) (1) When an asset manager is also the custodian of the client's funds, there is less risk of unethi behavior, because the clients have more privacy. (2) In the Securities and Exchanges Commission so-called Whistleblower Program', whistleblowe are entitled to a minimum 30% of the value of the fines imposed on fraudsters. 10 (3) The Basel Committee on Bank Supervision defines an operational loss as the loss in market va due to unexpected changes in the difference between long-term and short-term interest rates. F (4) One possible reason why reputational risk translates into a loss in the market value of a com is because investors demand a higher discount rate to value the stock of the company.

Explanation / Answer

1 Ans:- True, Because one person is managing the portfolio.

2 Ans:- False, Whistleblower are entitled to minimum 10% of value of fines imposed on fraudsters

3 Ans:- False, Operational risk includes risks from failure of procedure, people and systems.

4 Ans:- False, Reputational risk can arise from anywhere like from errant employees, social media etc.

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