ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Financial Risk: Financial Risk as the term suggests is the risk that involves financial loss to firms. Financial risk generally arises due to instability and losses in the financial market caused by movements in stock prices, currencies, interest rates and more.

Detailed explanation-2: -Economic risk is the risk involved in investing in a business opportunity in an international market that arises from changes in sovereign policies, market fluctuations, and counterparty credit risk.

Detailed explanation-3: -Economic Causes: Economic causes of business risk arise from changes in the different economic factors such as increasing competition, changing market conditions, increase in price of raw materials, production cost and wages.

Detailed explanation-4: -strategic risk-eg a competitor coming on to the market. compliance and regulatory risk-eg introduction of new rules or legislation. financial risk-eg interest rate rise on your business loan or a non-paying customer. operational risk-eg the breakdown or theft of key equipment.