What is financial risk, and how does it arise?

Q: What is Interest Rate Risk and Cash Flow Risk

A: Interest rate risk: The interest rate risk is the risk that occurs due to the change in the interest…

Q: Is it true that current liabilities are riskier than long-term liabilities?

A: Liabilities: Liabilities are debt and obligations of a business. These are the claims against the…

Q: What is hedge accounting?

A:

Q: What is financial risk? How is it related to business risk?

A: The financial risk is the risk which is related to the non-payment of the fixed financial charges.…

Q: What is a cash flow hedge?

A:

Q: What are the risks of investing in an ESOP?

A: ESOP stands for Employee Stock Ownership Plan. It is a plan that gives an ownership interest in the…

Q: Are the financial projections realistic and healthy?

A: Estimating things before the real cost and revenue incurred is known as financial estimation.…

Q: What means Finance?

A: The term finance means the management of cash and incorporates activities like, projecting, savings,…

Q: What is financial engineering?

A: Answer: Financial engineering is a process of solving problems and financial problems by using…

Q: o risk premiums influence financial decisions regarding risk and re

A: Step 1 A risk premium is an investment return that is expected to generate more than the level of a…

Q: What is reinvestment rate risk?

A: The reinvestment rate risk is the potential decline in the interest income that tends to be a result…

Q: What is the causes of the financial risk?

A: financial risk - financial risk is the possible danger of losing money from an investment made by…

Q: What is a financial security?

A: Investors use financial security to be secured financially as they can get some income on periodic…

Q: Define the term exposure to financial risk?

A: The question is based on the concept of Financial risk and its exposure.

Q: What is financial risk?

A: Risk refers to the undesired consequences arises due to the uncertainty. In other words, risk refers…

Q: What is the purpose of a cash flow hedge?

A:

Q: What is the difference between business risk and financial risk?

A: Risk Analysis: The risk analysis is defined as the process of recognizing the potential problems…

Q: What is Interest Risk and Cash Flow Risk?  What is the difference between Interest Risk and Cash…

A: Risk exists in all business operations and transactions however the business should take actions to…

Q: a) What is the general characteristics of Risk Financing – Risk Retention Methods

A: Hi, Thanks for the Question, Since you asked multiple questions, we will answer first question for…

Q: What kind of investment is considered to be risk-free?

A: A risk-free investment is an investment that has a minimum or no fluctuation from the expected…

Q: How might you mitigate the risks that are mentioned? Market, Liquidity, and Operational.

A: Businesses face various types of risks that affect survival and growth of the company. Risks that a…

Q: How the risk and return trade-off can be applied in real life?

A: The risk-return tradeoff states that the return rises with an increase in risk. Investors use this…

Q: What is the relationship of risk to the investment?

A: There is a direct relationship between risk and return in investment decision making. It means…

Q: What is commercial risk?

A: In financial terms, risk is defined as the possibility that the real profits from an outcome or…

Q: When is the financial risk by far the most critical element to consider?

A: Introduction: Risk can be characterized in terms of the uncertainty of future consequences resulting…

Q: What is risk? Why must risk as well as return be considered by the financial manager who is…

A: Risk is associated with every business it is one of the important functions of the management to…

Q: What is a financial risk management certificate?

A: Financial risk management course refers to the professional qualification which focus provides the…

Q: Could you explain the term "financial risk" in simple terms

A: Financial risk - The risk of losing money on an investment.

Q: Explain the difference between financial risk andbusiness risk.

A: Risk is referred as the chance of loss. An activity which leads to loss is termed as risk. The risk…

Q: Define risk-free asset?

A: Risk-free means that anything which does not have any kind of risk associated with it. They are free…

Q: What is financial management?

A: Financial management: Financial management is a managerial activity. This activities includes…

Q: What is financial advisor

A: A financial advisor may be a general term used for various financial professionals like insurance…

Q: What does investing activities includes?

A: Definition: Statement of cash flows: The statement of cash flow is a financial statement that shows…

Q: Answer the following questions: a) How do you handle financial risk?

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What is finance

A: Finance brings a business to life. Finance is important for every part of a firm's operations.…

Q: Illustrate how risk related to investment

A: There is a direct relationship between risk and return in investment decision making. It means…

Q: What is financial risk?

A: Risk means the type of danger. Financial risk refers to the situation of losing money on an…

Q: What is the relationship between risk and return?

A: Risk return relationship: The association among risk and return is recognized as the risk-return…

Q: What is behavioral finance?

A: Behavioral finance: It is a sub-field of behavioral financial matters, shows that psychological and…

Q: Explain current liabilities are riskier than long-term liabilities?

A: Liabilities:   A liability is a sum of money owed by the company towards external entities like a…

Q: How to deal with financial risk

A: Financial risk is always present in business situations but one thing we can do it that we can…

Q: What are some determinants of business risk?

A: Business risk is referred as the exposure of risk factors towards a company or a business which…

Q: What does “investment risk” mean?

A: Risk is referred as uncertainty or loss. Financial risk is referred as the variability of actual…

Q: Briefly describe the meaning of financial risks and its major types

A: Risk can be described as the likelihood of an unexpected or negative outcome. Any act or activity…

Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.