The greatest risk for finance companies is ____ risk.

Question

Quizplus · Accepted Answer

Finance companies primarily deal with lending money to individuals or businesses. The biggest risk they face is credit risk, which is the risk of default by the borrower. If the borrower fails to repay the loan or interest, it can lead to significant financial losses for the finance company. Settlement risk, interest rate risk, and exchange rate risk could also pose a threat, but they are not as directly linked to the core of the companies' operations as credit risk.

The Greatest Risk for Finance Companies Is ____ Risk