{"id":33705,"date":"2024-04-15T09:20:32","date_gmt":"2024-04-15T09:20:32","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=33705"},"modified":"2024-04-15T09:20:32","modified_gmt":"2024-04-15T09:20:32","slug":"match-the-items-of-list-i-with-the-items-of-list-ii-and-select-the-correct-answer-list-i-list-ii-a-liquidity-risk-1-risk-related-to-purchasing-power-of-income-b-business-risk-2-risk-related-to-fi","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/match-the-items-of-list-i-with-the-items-of-list-ii-and-select-the-correct-answer-list-i-list-ii-a-liquidity-risk-1-risk-related-to-purchasing-power-of-income-b-business-risk-2-risk-related-to-fi\/","title":{"rendered":"Match the items of List-I with the items of List-II and select the correct answer: List-I List-II a. Liquidity risk 1. Risk related to purchasing power of income b. Business risk 2. Risk related to firm&#8217;s capital structure c. Financial risk 3. Risk related to inability to pay its dues on time d. Inflation risk 4. Risk related to fluctuation in profits"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;a-2, b-3, c-4, d-1&#8243; option2=&#8221;a-1, b-4, c-3, d-2&#8243; option3=&#8221;a-3, b-2, c-4, d-1&#8243; option4=&#8221;a-3, b-4, c-2, d-1&#8243; correct=&#8221;option3&#8243;]<!--more--><\/p>\n<p>The correct answer is: <strong>C. a-3, b-2, c-4, d-1<\/strong><\/p>\n<ul>\n<li><strong>Liquidity risk<\/strong> 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.<\/li>\n<li><strong>Business risk<\/strong> is the risk that a company&#8217;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.<\/li>\n<li><strong>Financial risk<\/strong> 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.<\/li>\n<li><strong>Inflation risk<\/strong> is the risk that the purchasing power of a company&#8217;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.<\/li>\n<\/ul>\n<p>Here is a more detailed explanation of each option:<\/p>\n<ul>\n<li><strong>Option A<\/strong> is incorrect because it matches liquidity risk with inflation risk. Inflation risk is the risk that the purchasing power of a company&#8217;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.<\/li>\n<li><strong>Option B<\/strong> is incorrect because it matches business risk with financial risk. Business risk is the risk that a company&#8217;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.<\/li>\n<li><strong>Option C<\/strong> is correct because it matches each item in List-I with the correct item in List-II.<\/li>\n<li><strong>Option D<\/strong> 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.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;a-2, b-3, c-4, d-1&#8243; option2=&#8221;a-1, b-4, c-3, d-2&#8243; option3=&#8221;a-3, b-2, c-4, d-1&#8243; option4=&#8221;a-3, b-4, c-2, d-1&#8243; correct=&#8221;option3&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[700],"tags":[],"class_list":["post-33705","post","type-post","status-publish","format-standard","hentry","category-business-finance","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Match the items of List-I with the items of List-II and select the correct answer: List-I List-II a. Liquidity risk 1. Risk related to purchasing power of income b. Business risk 2. Risk related to firm&#039;s capital structure c. Financial risk 3. Risk related to inability to pay its dues on time d. Inflation risk 4. Risk related to fluctuation in profits<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/match-the-items-of-list-i-with-the-items-of-list-ii-and-select-the-correct-answer-list-i-list-ii-a-liquidity-risk-1-risk-related-to-purchasing-power-of-income-b-business-risk-2-risk-related-to-fi\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Match the items of List-I with the items of List-II and select the correct answer: List-I List-II a. Liquidity risk 1. Risk related to purchasing power of income b. Business risk 2. 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