Certified Management Accountant 2026 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 430

What type of risk encompasses the possibility of a financial loss within a business context?

Operational risk

Financial risk

Strategic risk

Business risk

Business risk refers to the potential for financial loss that arises from the everyday operations and environment of a company. It encompasses a wide range of uncertainties that can affect an organization's profitability and overall viability. This risk can stem from various sources, including market conditions, competition, regulatory changes, and operational inefficiencies.

Understanding business risk is crucial for management accountants as it influences strategic decision-making and risk management strategies. Companies may face challenges such as unexpected shifts in consumer demand, fluctuations in pricing, or disruptions in supply chains, all of which can lead to decreased revenues or increased costs. Therefore, effectively assessing and mitigating business risk is vital for sustaining growth and maintaining financial health in a competitive landscape.

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