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Question:

What is the concept of business risk? Discuss its causes and types.

Answer:

Concept: Business risk is the likelihood of facing losses or lower profits due to uncertainties in the business environment. Causes:

  • Natural Causes: Events like earthquakes, floods, or droughts.
  • Economic Causes: Fluctuations in demand and supply, inflation, or recession.
  • Human Causes: Employee errors, strikes, or management inefficiencies.
  • Political Causes: Changes in laws, regulations, or instability in governance. Types:
  • Speculative Risks: Involves gain or loss (e.g., stock trading).
  • Pure Risks: Only result in loss, such as theft or natural disasters.


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  • 4 months ago

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  • Answered by Ekta Mehta
  • 4 months ago

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  • Answered by Ekta Mehta
  • 4 months ago

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