1. Liquidity Risk: This is the risk that ABC may not be able to meet its short-term financial demands. This could occur if ABC is unable to convert its assets into cash without a loss of capital and/or income in the process.

2. Credit Risk: This is the risk of default on a debt that may arise from a borrower failing to make required payments. In the case of ABC, if the company fails to make its loan payments, it would face credit risk.

3. Interest Rate Risk: This is the risk that an investment's value will change due to a change in the absolute level of interest rates, the spread between two rates, in the shape of the yield curve, or in any other interest rate relationship. If the interest rates increase, ABC will have to pay more in interest expenses, which could negatively impact their financial situation.

4. Currency Risk: Since the loan is from an Indonesian bank, it's likely denominated in Indonesian Rupiah. If ABC's home currency is not Rupiah, they face currency risk. If the Rupiah appreciates against ABC's home currency, the loan becomes more expensive to pay off. This is the currency risk.

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1. Liquidity Risk: This is the risk that ABC may not be able to meet its short-term financial demands. This could occur if ABC is unable to convert its assets into cash without a loss of capital and/or income in the process.

2. Credit Risk: This is the risk of default on a debt that may arise from a borrower failing to make required payments. In the case of ABC, if the company fails to make its loan payments, it would face credit risk.

3. Interest Rate Risk: This is the risk that an investment's value will change due to a change in the absolute level of interest rates, the spread between two rates, in the shape of the yield curve, or in any other interest rate relationship. If the interest rates increase, ABC will have to pay more in interest expenses, which could negatively impact their financial situation.

4. Currency Risk: Since the loan is from an Indonesian bank, it's likely denominated in Indonesian Rupiah. If ABC's home currency is not Rupiah, they face currency risk. If the Rupiah appreciates against ABC's home currency, the loan becomes more expensive to pay off. This is the currency risk.

Knowee AI · Accepted Answer

1. Liquidity Risk: This is the risk that ABC may not be able to meet its short-term financial demands. This could occur if ABC is unable to convert its assets into cash without a loss of capital and/or income in the process.

2. Credit Risk: This is the risk of default on a debt that may arise from a borrower failing to make required payments. In the case of ABC, if the company fails to make its loan payments, it would face credit risk.

3. Interest Rate Risk: This is the risk that an investment's value will change due to a change in the absolute level of interest rates, the spread between two rates, in the shape of the yield curve, or in any other interest rate relationship. If the interest rates increase, ABC will have to pay more in interest expenses, which could negatively impact their financial situation.

4. Currency Risk: Since the loan is from an Indonesian bank, it's likely denominated in Indonesian Rupiah. If ABC's home currency is not Rupiah, they face currency risk. If the Rupiah appreciates against ABC's home currency, the loan becomes more expensive to pay off. This is the currency risk.

ABC received a loan from , an Indonesian bank. Identify the risks that ABC hasLiquidity riskCredit riskInterest rate riskCurrency riskAnswer :

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ABC received a loan from , an Indonesian bank. Identify the risks that ABC has

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