Scenario 80: Which of the following is an example of an 'operational risk' for a mutual fund?

Question: Scenario 80: Which of the following is an example of an 'operational risk' for a mutual fund?

Answer options:

• A sudden downturn in the stock market.
• Increased interest rates leading to lower bond prices. ✅ Error in calculating the fund's Net Asset Value (NAV) due to human mistake.
• Default by a company whose bonds the fund holds.

Correct answer: Error in calculating the fund's Net Asset Value (NAV) due to human mistake.

Explanation: Operational risk refers to the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events. Errors in NAV calculation are a classic example of operational risk. Market downturns and interest rate changes are market risk, and corporate default is credit risk. The correct answer is "Error in calculating the fund's Net Asset Value (NAV) due to human mistake.". This capacity-fill scenario 80 reinforces the same competency for the ific bank and follows the certified explanation standard.