Question

c. evaluate business viability
d. making pricing and cost - control decisions
application:

• how might break - even analysis help ava when entering a competition or pitching to investors?

1. define financial risk:
2. define the following types of financial risk:

a. business risk:
b. credit risk:
c. market risk:
d. liquidity risk:

1. why might an entrepreneur still take on financial risk?

Explanation:

1. Financial risk refers to the potential for loss in financial investments or business operations due to various factors like market fluctuations, credit - worthiness issues etc.

9a. Business risk is the exposure a company or business has to factor(s) that will lower its profits or cause it to go out of business. These can include competition, changes in consumer preferences, and operational inefficiencies.
9b. Credit risk is the probability of a loss resulting from a borrower's failure to repay a loan or meet contractual obligations.
9c. Market risk is the risk of losses in positions arising from movements in market prices, such as stock prices, interest rates, exchange rates, and commodity prices.
9d. Liquidity risk is the risk that a company or individual will not be able to meet short - term financial obligations as they come due because of an inability to convert assets into cash quickly without significant loss in value.

1. An entrepreneur might take on financial risk for potential high rewards, to pursue innovation and new business opportunities, to gain market share, or to achieve long - term business growth.

Answer:

1. Financial risk: The potential for loss in financial investments or business operations due to various factors.

9a. Business Risk: Exposure to factors lowering profits or causing business failure.
9b. Credit Risk: Probability of loss from borrower's non - repayment.
9c. Market Risk: Risk of losses from market price movements.
9d. Liquidity Risk: Risk of inability to meet short - term obligations due to asset - to - cash conversion issues.

1. Potential high rewards, innovation pursuit, market share gain, long - term growth.