Financial risk can be affected by which of the following?

Financial risk refers to the possibility of losing money on an investment or business operation. One significant factor that affects financial risk is changes in interest rates. When interest rates fluctuate, they can impact a company's cost of borrowing as well as the return on investments. For example, if interest rates rise, the cost of servicing existing debt increases, which can affect cash flow and profitability. Conversely, if rates fall, it may lower borrowing costs but also reduce the income generated from fixed-income investments. Therefore, changes in interest rates directly influence a company's financial risk by altering the financial landscape in which it operates.

The other factors listed, while important for overall business performance, do not specifically pertain to the financial risk in the same direct manner. The physical safety of company facilities, employee satisfaction levels, and operational efficiency contribute to the company's operational and strategic risk but do not have the same immediate impact on financial metrics like interest rates do.