Financial Risk
Subject: Finance | Topics:

Financial Risk refers to the possibility of a corporation or government defaulting on its bonds, which would cause those bondholders to lose money. It is a term often used to imply downside risk, meaning the uncertainty of a return and the potential for financial loss. This risk is primarily a function of the relative amount of debt that the firm uses to finance its assets. It provides guidelines that those who make financial decisions for the company must follow.

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