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

Question

Quizplus · Accepted Answer

The risk caused by changes in inflation that affects revenues, expenses and profitability is known as purchasing power risk. This risk refers to the risk that the future value of cash flows (both inflows and outflows) may decrease due to inflation.

The Risk Caused by Changes in Inflation That Affect Revenues