Statement I: Financial risk is associated with a firm’s sources of financing.
Statement II: The use of financial leverage is the source of financial risk.

A. Statement I is correct.

B. Statement II is correct.

C. Both statements are correct.

D. Both statements are incorrect.

Reference: https://www.investopedia.com/ask/answers/062315/what-are-key-differences-between-financial-risk-and-business-risk-company.asp