Credit risk is not associated with the potential that a derivative may not be successful in hedging a specific asset. Credit risk is the risk that the counterparty to a derivative contract will default on its obligations.
The risk associated with the potential that a derivative may not be successful in hedging a specific asset is basis risk. Basis risk is the risk that the price of the derivative will not move perfectly in line with the price of the underlying asset.
For example, a company may use a futures contract to hedge the price of a commodity that it sells. If the price of the commodity falls, the company will lose money on its sales.
However, if the price of the futures contract does not fall as much as the price of the commodity, the company will not be fully hedged and will still lose money.
OCR is a technology that converts images of text into machine-encoded text. It works by identifying the individual characters in the image and then converting them into their corresponding digital codes.
OCR is used in a wide variety of applications, including document scanning, document management, and machine translation.
This is valid because a natural monopoly exists when only one firm can effectively offer a product due to economic or technical factors.
Ensuring that the organization shares all major risks is not a benefit of enterprise risk management (ERM).
ERM is a holistic approach to risk management that helps organizations identify, assess, manage, and monitor risks.
It is designed to help organizations achieve their strategic objectives by improving risk-informed decision-making and increasing resilience to adverse events.
In a non-competitive market, where there are no direct competitors to differentiate from, investment in brand development may not be as crucial as in a competitive market.
While brand building can still be beneficial in the long run, the immediate need to establish a brand may be less pressing in the absence of competition.
Check digit verification is the most likely control to catch the mistake of ordering product Z96015 instead of Z96014. Check digit verification is a method of detecting errors in data entry. It works by assigning a check digit to the data, which is calculated based on the other digits in the data. When the data is entered into a system, the system calculates the check digit again and compares it to the stored check digit. If the two check digits do not match, the system knows that there is an error in the data.
In the case of the consumer's order, the check digit verification would have calculated a different check digit for the product code Z96015 than for Z96014. When the system entered the order, it would have compared the calculated check digit to the stored check digit and detected the error.
This is accurate since end-user computing entails individual users developing and executing computer applications in a decentralized manner, and these users are most likely to use personal computers.
