Members of a business development team are involved in the ongoing process of creating a new installation hardware device, owing to widespread consumer demand. They are worried that by the time the finished product hits the market, customers' needs might change. Consequently, the new device, unable to satisfy customers' current needs, would become a failure. Which of the following risks does this best exemplify?
A) Strategic risk
B) Market risk
C) Credit risk
D) Internal risk

Question

Quizplus · Accepted Answer

The risk described in the scenario is market risk, which pertains to the uncertainty about future market conditions and demand. The potential for customers' needs to change before the product is launched is a prime example of market risk. Strategic risk involves factors that might impact a company's strategic direction or decision-making, while credit risk pertains to the potential for financial losses due to the default of a debtor. Internal risk involves the possibility of financial loss arising from internal issues such as fraud, operational inefficiencies, or technical failures.

Members of a Business Development Team Are Involved in the Ongoing