Hostess and Kodak recently filed for bankruptcy protection in an attempt to restructure their debts.One could assume that both of these companies experienced too much ________ risk.
A)business
B)interest rate
C)financial
D)liquidity

Question

Quizplus · Accepted Answer

The term "bankruptcy protection" implies that the companies were facing financial difficulties and were unable to meet their financial obligations. Therefore, the best choice would be C) financial risk. Business risk refers to the risk of operating in a certain industry or market, whereas interest rate risk relates to the impact of interest rate changes on a company's borrowing costs. Liquidity risk pertains to a company's ability to meet its short-term financial obligations. Of these options, financial risk would be the most relevant to companies filing for bankruptcy protection.

Hostess and Kodak Recently Filed for Bankruptcy Protection in an Attempt