The risk which arises all the activities from contingent liabilities and assets is considered as ____________?
Correct answer: A. off balance sheet risk
- A. off balance sheet risk
- B. income statement risk
- C. balance of trade risk
- D. balance of payment risk
Explanation
Contingent assets and liabilities arise from commitments that may not appear on the balance sheet until a future event occurs, creating off-balance-sheet risk. Trade and payments balances concern international transactions, not such financial commitments.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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