SIE practice questioneasyFinancial risk
A highly leveraged company is more exposed to which kind of risk?
- ACall risk
- BFinancial risk✓ Correct answer
- CInterest rate risk
- DMarket risk
Explanation
Why B — Financial risk
Financial risk is the risk of insolvency due to the use of debt financing. Call and interest rate risks are unrelated, and market risk is broader in scope.
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