Which of the following is a common operational risk?

Prepare for the Operational Risk Management Exam with multiple choice questions, expert explanations, and comprehensive study tips. Enhance your risk management skills and boost your confidence to excel on exam day!

Supply chain disruptions are a common operational risk because they directly affect an organization's ability to deliver products or services. Operational risks arise from inadequate or failed internal processes, people, and systems, or from external events. Supply chain disruptions can occur due to various factors, such as natural disasters, labor strikes, political instability, or vendor failures. When such events happen, they can lead to delays in production, increased costs, or a complete halt in operations, significantly impacting an organization's performance and financial stability.

In contrast, market fluctuations, currency exchange issues, and investment losses are typically categorized under financial risks rather than operational risks. Market fluctuations pertain to changes in the prices of securities, commodities, or other financial instruments, while currency exchange issues involve the risks associated with fluctuating exchange rates. Investment losses relate to the decline in the value of an investment, which is also financial in nature. These categories of risk are generally managed within a different framework compared to operational risks, emphasizing the specific nature and impacts of supply chain disruptions on an organization's operations.

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