Q198
Risk which arises from insufficient capital available to balance sudden decrease in assets value is classified as
A.
insolvency risk
AnswerB.
solvency risk
C.
balanced risk
D.
unbalanced risk
Answer: Option A
Solution
Answer: Option A
Solution:
Risk which arises from insufficient capital available to balance sudden decrease in assets value is classified as insolvency risk. Insolvency risk is defined as the risk that an individual or company will not be able to meet its debt obligations.