Question

Hewlett-Packard is a publicly traded corporation whose principal activity is making and selling computers. Customers can buy an HP computer directly from HP online if they pay with a bank credit card (such as Visa or Mastercard). HP's risk exposures therefore include all of the following except:

Answer 1

HP's risk exposures include diversification, credit risk, and operational risk. However, credit risk is not a risk exposure for HP when customers buy their computers using a bank credit card.

Step-by-step explanation:

HP's risk exposures include diversification, credit risk, and operational risk. When customers buy an HP computer directly from HP online using a bank credit card, the risk of defaulting on the credit card payment falls on the bank rather than HP, so credit risk is not a risk exposure for HP. However, the other risks such as diversification risk (the risk of relying too heavily on one product line) and operational risk (the risk of disruption in the manufacturing or delivery process) are still relevant to HP's business.