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Answer -
Business risk, this term is referred to as the possibility of earning inadequate profits or losses due to unforeseen or unexpected circumstances. It can happen when demand for a particular product declines due to increased competition or change in customer preferences.
Nature of business risks are:
1. Profit related to risk: Profit is obtained as a reward for the risk taken in business.
2. Degree of risk taken depends upon the scale of operation of business
3. Risk is an essential part of any business.
4. Business risk arises due to uncertainties in business.