Business Risk

Business Risk is the risk associated with projections of a firm’s future returns on assets or returns on equity if the firm uses no debt.

 According to John J. Hampton,” Business risk is defined as the chance that the firm will not have the ability to compete successfully with the assets that it purchases.”

   This kind of risk is related with Natural and Human uncertainties.

Business risk is the probability that the economy in a bank’s market area will turn down into a recession, with reduced demand for loans, deposits, and other bank services.