Business risk is industry-specific, whereas financial risk is more firm-specific.

Question

Quizplus · Accepted Answer

Business risk refers to the inherent risks associated with a particular industry or market, such as changes in consumer preferences or economic downturns, which affect all firms operating within that industry. Financial risk, on the other hand, is more specific to individual firms and relates to their ability to meet financial obligations or manage debt levels.

Business Risk Is Industry-Specific, Whereas Financial Risk Is More Firm-Specific