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  John is asked to *uate the existing risk management system of a bank. She is asked to match the following events to the corresponding type of risk.
  Event:
  1.Insufficient training leads to misuse of order management system.
  2.Credit spreads widen following recent bankruptcies.
  3.Option writer does not have the resources required to honor a contract.
  4.Credit swaps with counterparty cannot be netted because they originated in multiple jurisdictions.
  A.1: legal risk, 2: credit risk, 3: operational risk, 4: credit risk
  B.1: Operational risk, 2: credit risk, 3: operational risk, 4: legal risk
  C.1: Operational risk, 2: market risk, 3: operational risk, 4: legal risk
  D.1: Operational risk, 2: market risk, 3: credit risk, 4: legal risk
  Answer: D
  Explanation: Insufficient training lead to misuse of order management system is an example of operational risk.
  Widening of credit spreads represents an increase in market risk. An option writer not honoring the obligation in a contract is a credit risk event. When a contract is originated in multiple jurisdictions leading to problems with enforceability, there is legalrisk.