Explain Venture Capital and Credit Rating of Business risk.
Answers
Answer:
Credit rating is an analysis of the credit risks associated with a financial instrument or a financial entity. ... Credit ratings are an important parameter to consider while investing be it in fixed deposits (FDs), company deposits, NCDs or other investments. For equity, initial public offerings of shares are also rated.
Explanation:
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Explanation:
Money borrowed on higher rates of interest will usually increase the debt burden or debt trap.
Debt trap is a situation where the debtor will not be able to repay the debt incurred.
Informal sources of credit charge higher rates of interest.
For example : Small farmers taking loan from money lenders at higher rates of interest for farming purposes and not able to pay back will result in selling a portion of farmers' land and paying back to the money lender.