BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Risk Premium consists of ____
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Premium for taking Business Risk
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Premium for taking Financial Risk
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All of the Above
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None of the Above
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Explanation:
Detailed explanation-1: -The risk premium is comprised of five main risks: business risk, financial risk, liquidity risk, exchange-rate risk, and country-specific risk. Business risk refers to the uncertainty of a company’s future cash flows, while financial risk refers to a company’s ability to manage the financing of its operations.
Detailed explanation-2: -There are actually five types of risk premium – business risk, financial risk, liquidity risk, exchange-rate risk, and country-specific risk.
Detailed explanation-3: -What are the 5 components of risk factors in investment? The five main risks that comprise the risk premium are business risk, financial risk, liquidity risk, exchange-rate risk, and country-specific risk.
There is 1 question to complete.