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Non-financial risks
The risks incurred by an entity as a result of its exposure to changes in financial variables like interest rates, exchange rates, market prices and debtors' solvency.
(1) Financial risks may be classified as market risk, cash flow risk, credit risk and liquidity risk.
(2) Transactions in financial instruments also involve non-financial risks, including operational risk and legal risk.
(3) Financial risk also means the risk resulting from an enterprise's decision to partially fund its activities through debt rather than equity, a risk related to the financial leverage concept.
Translations
Synonyms and variations
- Financial risks