Risk related to interest rate: Rising up of the interest rates might compress the cash flow by pouring the loan repayments at the equal time as price rises is likely to be growing other expenses. The risk can basically be finely tuned if the business in a fund concentrated industry. In this type of risk, commonwealth bank is able to manage the projects, like property expansion, with important long-standing capital needs. One can also borrow the fund in the ongoing growth of business, but sometimes the company is not able to realize the regular benefits of their respective growth. The company can borrow to buy the assets, but increasing interest rates actually mean that the repayments have exceed the income by the generated assets, and in that …show more content…
If the source stock of the business is equipped offshore, then the currency risk might be on the radar. The economic strength of Australia results in the success of a trade country, chiefly as an exporter. The Australian dollar is broadly seen as a commodity support currency. As the prices within commodity fluctuate, consequently the dollar also fluctuate which results to make Australian dollar one of the world’s more unpredictable currencies. It makes practical implications for the customer and also for bank. Let us make it more clear by taking an example, visualize that a customer had to import a piece of tool that costs US$100,000. Unless the customer protect himself against the currency fluctuations, the tool might cost him between AU$102,187 and AU$163,345, totally dependent on the time of transaction. Such type of risk might also harm the business …show more content…
One can face a distinctive place of risks as well as opportunities that will change as the business of commonwealth bank grows and develop. Therefore it is quite important to talk to any expert before taking any risk in the business. Talking to any expert becomes an opportunity for any businessman to get rid of risks that can enter in their path and destroy the business. Another opportunity that one might look at is the relationship executive which can help the business to explore the risks that confronts the business and build up a customized plan for the individual situation. Bank can ask to his relationship executive about the extensive variety of Commonwealth Research accessible to help the business stay updated with the current economic