Refers to the inability of the business to meet its obligations as they mature on account of insufficient resources. A. Default risk B. Interest-rate risk C. Purchasing power risk D. Liquidity risk

Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter14: Completing A Quality Audit
Section: Chapter Questions
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1. Refers to the inability of the business to meet its obligations as they mature on account of insufficient resources.
A. Default risk
B. Interest-rate risk
C. Purchasing power risk
D. Liquidity risk
 
2. A type of risk that relates to changes in the prime interest rate which have significant effects on the cost of money but not directly on the liquidity of the business.
A. Financial risk
B. Interest-rate risk
C. Purchasing power risk
D. Liquidity risk
 
3. Refers to the changes in the conditions and those variables affecting the cost of capital, capital structure and also management decisions made to directly influence the market price of a stock.
A. Financial risk
B. Interest-rate risk
C. Purchasing power risk
D. Liquidity risk
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