What is business risk? What is its nature.
Answers
Explanation:
Business risks. The term business risk refers to the possibility of inadequate profits or even losses due to uncertainties e.g., changes in tastes, preferences of consumers, strikes, increased competition, change in government policy, obsolescence etc
Answer:
Explanation:
The term ‘business risk’ refer to the possibility of inadequate profits or even losses, due to uncertainties or unexpected events. For example, the demand for a particular product may decline due to change in tastes and preferences of consumers. Decrease in demand will result in lesser sale and thereby lesser profits.
Nature of business risk : The nature of business risks can be understood in terms of its peculiar characteristics:
1]Business risks arise due to uncertainties.
2]Risk is an essential part of every business.
3]Degree of risk depends mainly upon the nature and size of business.
4]Profit is the reward for risk taking.