Fairfax is a manufacturer of televisions and touch screens. Fairfax utilizes a proprietary chemical manufacturing technology to make its high-definition displays. Fairfax is running low on cash and has several overdue accounts payable. Cabot Chemical is particularly concerned because of Fairfax's inability to pay. In addition, Fairfax must pay its loans back to the bank immediately because of violated loan covenants. What type of risk is Fairfax experiencing?
A) Interest rate risk
B) Liquidity risk
C) Other price risk
D) Credit risk
Correct Answer:
Verified
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