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      Question

      Which of the following risk factors pose business risk

      to an entity?                       I.        Sales volume and sales price                     II.        Purchase Price of raw material                    III.        Operational expenses
      A Only I Correct Answer Incorrect Answer
      B I and II Correct Answer Incorrect Answer
      C Only II Correct Answer Incorrect Answer
      D I and III Correct Answer Incorrect Answer
      E All of the above Correct Answer Incorrect Answer

      Solution

      Business risk is the exposure a company or organization has to factor(s) that will lower its profits or lead it to fail. Sales volume and price, purchase prices, operational expenses have a direct bearing on the profitability of the company and are factors leading to business risk.

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