a-2, b-3, c-4, d-1
a-1, b-4, c-3, d-2
a-3, b-2, c-4, d-1
a-3, b-4, c-2, d-1
Answer is Right!
Answer is Wrong!
The correct answer is: C. a-3, b-2, c-4, d-1
- Liquidity risk is the risk that a company will not be able to meet its short-term obligations. This can happen if the company does not have enough cash on hand or if it is unable to sell its assets quickly enough.
- Business risk is the risk that a company’s profits will fluctuate due to changes in the economy, industry, or competition. This risk is inherent in all businesses, and it cannot be eliminated completely.
- Financial risk is the risk that a company will not be able to meet its long-term obligations. This can happen if the company takes on too much debt or if its assets are not worth enough to cover its liabilities.
- Inflation risk is the risk that the purchasing power of a company’s income will decline due to inflation. This risk is particularly high for companies that have a lot of debt, as the interest payments on their debt will increase in real terms.
Here is a more detailed explanation of each option:
- Option A is incorrect because it matches liquidity risk with inflation risk. Inflation risk is the risk that the purchasing power of a company’s income will decline due to inflation, while liquidity risk is the risk that a company will not be able to meet its short-term obligations.
- Option B is incorrect because it matches business risk with financial risk. Business risk is the risk that a company’s profits will fluctuate due to changes in the economy, industry, or competition, while financial risk is the risk that a company will not be able to meet its long-term obligations.
- Option C is correct because it matches each item in List-I with the correct item in List-II.
- Option D is incorrect because it matches liquidity risk with financial risk. Liquidity risk is the risk that a company will not be able to meet its short-term obligations, while financial risk is the risk that a company will not be able to meet its long-term obligations.