The inability of a business to meet its fixed financial obligations like payment of interest is know...........

The inability of a business to meet its fixed financial obligations, like payment of interest, is known as

Business risk

Financial risk

Long-term risk

Market risk

• Option 1: Business risk

- This refers to the potential for losses or inadequate profits due to uncertainties in a company's operations.

- It's tied to the core activities and the uncertainty in the market.

• Option 2: Financial risk

- This involves the inability to meet financial obligations like paying interest and debt.

- It stems from a company’s capital structure, including its use of debt.

• Option 3: Long-term risk

- This isn't a common term typically used in this context.

- It might involve risks impacting a company over an extended period but isn't specifically about financial obligations.

• Option 4: Market risk

- This is the risk of losses due to changes in market conditions, like interest rates or stock prices.

Correct Answer: Financial risk

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