BUSINESS ADMINISTRATION
ENTREPRENEURIAL DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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1. Risk refers to the variability of outcomes (or returns); and is important for a firm to weigh risks in decisions.
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2. if there is risk, the returns are certain.
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3. A firm operating in a risk-free environment will never expand.
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4. Risk is lot of knowledge about current conditions.
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Detailed explanation-1: -A firm-specific risk is the unsystematic risk associated with a specific investment in a firm that is completely diversifiable as per the theory of finance. Under this risk, the investor can lower their risk by increasing the number of investments they have in their portfolio.
Detailed explanation-2: -: possibility of loss or injury : peril. : someone or something that creates or suggests a hazard. 3. : the chance of loss or the perils to the subject matter of an insurance contract. also : the degree of probability of such loss.
Detailed explanation-3: -Risk management is the process of identifying, assessing and controlling threats to an organization’s capital and earnings. These risks stem from a variety of sources, including financial uncertainties, legal liabilities, technology issues, strategic management errors, accidents and natural disasters.
Detailed explanation-4: -(b) Interest Rate Risk refers to the uncertainty of future market values and of the. size of future income, caused by fluctuations in the general level of interest. rates. The interest rate risk particularly affects debt securities.