The risk caused by variations in interest expense unrelated to sales or operating income arising from changes in the level of interest rates in the economy is called:
A) financial risk
B) business risk
C) interest rate risk
D) economic rate risk

Question

Quizplus · Accepted Answer

The given scenario describes interest rate risk, which is the risk that a company's earnings will be negatively affected by fluctuations in interest rates. Financial risk refers to a company's ability to meet its financial obligations, while business risk relates to the risk inherent in a company's operations. Economic risk is a broader term that encompasses various risks affecting a company's overall performance, including political risk and currency risk. None of these terms specifically describe the scenario presented in the question.

The Risk Caused by Variations in Interest Expense Unrelated to Sales