SIE practice questionmediumFinancial risk
A business’s excessive leverage causes it to miss interest payments. What risk does this best illustrate?
- AReinvestment risk
- BInflation risk
- CFinancial risk✓ Correct answer
- DConcentration risk
Explanation
Why C — Financial risk
Missing interest payments due to high debt is financial risk. The other risks do not directly relate to excessive debt use.
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