Risk Can Be Apportioned Between Financial and Business Risk

question 40

True/False

Risk can be apportioned between financial and business risk.Financial risk and business risk are related in that, as business risk increases so does financial risk, although the correlation between the two is not perfect.

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Definitions:

Priority

In legal and financial contexts, it refers to the order of precedence in rights, claims, access, or treatment.

Compensated Surety

A guarantor who receives compensation for guaranteeing the performance or obligations of another party.

Accommodation Surety

A third party who guarantees the debt or obligation of another without benefit to themselves, often to help the borrower obtain a loan.

Guarantor

An individual or entity that agrees to be responsible for another's debt or performance under a contract if the primary party does not meet their obligations.