Final answer:
The equity risk derived from a firm's capital structure policy is called financial risk. Option (D) is correct.
Step-by-step explanation:
The equity risk derived from a firm's capital structure policy is called financial risk.
Financial risk generally relates to the odds of losing money. The financial risk most commonly referred to is the possibility that a company's cash flow will prove inadequate to meet its obligations. Financial risk can also apply to a government that defaults on its bonds.
There are many ways to categorize a company's financial risks. One approach for this is provided by separating financial risk into four broad categories: market risk, credit risk, liquidity risk, and operational risk.
The five types of risk are operational, financial, strategic, compliance, and reputational. Financial risk refers to your business' ability to manage your debt and fulfil your financial obligations. This type of risk typically arises due to instabilities, losses in the financial market or movements in stock prices, currencies, interest rates, etc.