Question

In: Finance

Summarize any risks face by consumer during Covid-19 crisis. (Short Essay) (30 Marks)

Summarize any risks face by consumer during Covid-19 crisis. (Short Essay)

Solutions

Expert Solution

Risk which are faced by the consumer during covid-19 has been higher because of the risk of getting infected by the virus is Higher because it is a highly contagious virus and they need to highly secure themself in order to buy from a physical Store.

There are other risk also which are mostly on the economic front because these buyers are buying into a scenario where there is a lot of economic uncertainty and there is a risk of an impending recession also these buyers have bought earlier and their payment is due at the time of the covid-19, they are finding it very difficult to repay amount of purchase, so they are finding it very illiquid as they do not have high amount of cash due to adverse economic scenario and these buyers have earlier taken the goods on the credit, & they are highly exposed to the risk of default.

Buyers are also facing a risk of being charged higher price for necessity goods because there are only certain companies which are operational and they are trying to charge a higher amount of money for the similar services they used to charge earlier, because they are the only companies who are authorised by the government to function and they have been charging higher than normal.

Buyers are also facing a risk of depreciation in their asset and their money value because these money value will be depreciating with lack of demand and time value of money also these are also leading to ideal cash and lack of demand from the buyers perspective because they are more into trying to secure themselves rather than trying to spend the money.


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