One of the Speculative Financial Risks Considered in an Enterprise

question 48

Multiple Choice

One of the speculative financial risks considered in an enterprise risk management program is the risk of loss because of adverse changes in commodity prices,interest rates,foreign exchange rates,and the value of money.This risk is called

• A)property risk.
• B)financial risk.
• C)strategic risk.
• D)operational risk.

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Definitions:

Market Value

The price at which an asset would trade in a competitive auction setting.

Par Value

A nominal or face value assigned to a share of stock in the company's charter, representing the minimum amount the stock can be sold for.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing the ownership interest of shareholders.

Debt Refunding

The process of replacing an existing debt obligation with a new one, often with more favorable terms.