Which of the following risks is the risk that happen with an important business partner and affects a large group of enterprises within an area or industry?

Which of the following risks is the risk that happen with an important business partner and affects a large group of enterprises within an area or industry?
A . Contagious risk
B . Reporting risk
C . Operational risk
D . Systemic risk

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Answer: D

Explanation:

Systemic risks are those risks that happen with an important business partner and affect a large group of enterprises within an area or industry. An example would be a nationwide air traffic control system that goes down for an extended period of time (six hours), which affects air traffic on a very large scale.

Incorrect Answers:

A: Contagious risks are those risk events that happen with several of the enterprise’s business partners within a very short time frame.

B, C: Their scopes do not limit to the important or general enterprise’s business partners. These risks can occur with both.

Operational risks are those risks that are associated with the day-to-day operations of the enterprise. It is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.

Reporting risks are caused due to wrong reporting which leads to bad decision. This bad decision due to wrong report hence causes a risk on the functionality of the organization.