Financial Risk

Which of the following investments carries the highest risk?

• United States government securities

• Insured Certificate of Deposits

• stock mutual funds

• individual stocks

When the borrower fails to make full and timely payments

• Financial Risk

• Default Risk

• Capital-loss Risk

• Inflation Risk

• Liquidity Risk

Which of the following is a primary factor in assessing financial risk in a business?

• Market competition

• Employee satisfaction

• Product design

• Brand color

What type of financial risk is associated with changes in interest rates?

• Credit Risk

• Market Risk

• Operational Risk

• Interest Rate Risk

Which financial risk involves the possibility of a government defaulting on its debt?

• Sovereign Risk

• Credit Risk

• Market Risk

• Operational Risk

What is the term for the risk that an investment's value will decrease due to changes in market conditions?

• Credit Risk

• Market Risk

• Operational Risk

• Liquidity Risk

Which of the following is considered a non-diversifiable risk?

• Market Risk

• Credit Risk

• Operational Risk

• Liquidity Risk

What type of financial risk is associated with a company's inability to meet its short-term financial obligations?

• Credit Risk

• Liquidity Risk

• Market Risk

• Operational Risk

Which of the following is a method to mitigate financial risk?

• Diversification

• Concentration

• Speculation

• Isolation

What is the risk of loss resulting from inadequate or failed internal processes, people, and systems?

• Credit Risk

• Market Risk

• Operational Risk

• Liquidity Risk