Business Essentials 2.05 Win, Lose, or Draw

People who go into business know that the business may not succeed. This possibility is referred to as business

• Risk

• Retention

• Downsizing

• Economizing

The general classifications of business risks are

• Competitive, strategic, financial and operational

• Production, hazard, operational, and strategic

• Hazard, operational, strategic, and financial

• Strategic, production, competitive, and hazard

A hurricane that destroys a business is an example of a(n) risk.

• Operational

• Financial

• Strategic

• Hazard

A garden store customer tripped over a plant, fell, and sued the store for damages. This is an example of a(n) risk.

• Strategic

• Operational

• Hazard

• Financial

A union strike that stops production at a manufacturing plant is a(n) risk.

• Financial

• Operational

• Strategic

• Hazard

What category of business risk includes production problems and incompetent employees?

• Operational

• Hazard

• Strategic

• Financial

When a rival's product on the market reduces sales of your company's product, your company is experiencing strategic risk cause by

• Regulatory and political issues

• Changing customer needs

• Obsolescence

• Competition

Financial loss from investing time and money to comply with accounting standards is an example of which strategic risk?

• Reputation damage

• Regulatory and political issues

• Changing customer needs

• Obsolescence

Which of the following is a pure business risk:

• Robbery

• Obsolescence

• Competition

• Inflation

Which of the following is an example of a business risk that cannot be covered by insurance:

• Goods lost in transit

• Destruction of building by fire

• Increase in interest rates

• Injury of employee on the job