The risk caused by changes in inflation that affect revenues, expenses and profitability is called:
A) interest rate risk
B) business risk
C) purchasing power risk
D) financial risk

Question

Quizplus · Accepted Answer

The risk caused by changes in inflation that affect revenues, expenses and profitability is called purchasing power risk. This risk is related to the loss of value of a currency over time due to inflation. It affects a company's ability to maintain profitability and can result in decreased purchasing power for both the company and its consumers. It is different from interest rate risk, which refers to the impact of changes in interest rates on a company's financial performance. Business risk relates to factors such as competition, market demand, and operational efficiency, while financial risk is concerned with a company's ability to meet its financial obligations.

The Risk Caused by Changes in Inflation That Affect Revenues