What is a business risk? What is its nature?


The term ‘business risks’ refers to the possibility of inadequate profits or even losses due to uncertainties or unexpected events. For example, demand for a particular product may decline due to change in tastes and preferences of consumers or due to increased competition from other producers.

Nature of business risks are:


(i) Business risks arise due to uncertainties:


(ii) Risk is an essential part of every business:


(iii) Degree of risk depends mainly upon the nature and size of business:


(iv) Profit is the reward for risk-taking.


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