Question

Which type of risk is a business exposed to in the event of the death, retirement, resignation, or disability of a key employee?

Option 1: Operational risk
Option 2: Market risk
Option 3: Credit risk
Option 4: Key person risk

Answer 1

Key person risk is the type of risk that a business is exposed to in the event of the death, retirement, resignation, or disability of a key employee.

Step-by-step explanation:

The type of risk that a business is exposed to in the event of the death, retirement, resignation, or disability of a key employee is Key person risk. This refers to the risk that the business may face due to the absence of a key individual who plays a critical role in the company's success.

For example, if the CEO of a company suddenly passes away, the business may experience disruptions in decision-making, leadership, and overall operations, which can hurt its financial performance and reputation in the market.