Question:
The risk related to inability to meet fixed financial charges like interest payment and other repayment obligations is known as:
The risk related to inability to meet fixed financial charges like interest payment and other repayment obligations is known as:
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Operating risk is related to the core operational activities of a business.- Business risk refers to the potential for a company to face financial loss due to market factors or operational failures.- Financial risk pertains to a company’s ability to meet its financial obligations, such as debt repayments.
Updated On: Feb 26, 2025
- Operating risk
- Financial risk
- Business risk
- None of the above
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The Correct Option is B
Solution and Explanation
The risk of being unable to meet fixed financial obligations such as interest payments and other debt repayments is known as financial risk. This type of risk is associated with the company’s capital structure and its ability to service debt. Thus, the correct answer is Financial risk.
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