Financial exposure is the maximum amount of money you can loose on a certain investment.

financial exposure = financial position * price

e.g

if you have 100 shares of ABC at $10 each

your financial position = 100

and

your financial exposure = 100*10

= $ 1000

An exposure consist of the potential financial effect of an event multiplied by its probability of occurrence and risk is with probability of occurrence. Thus an exposure is a risk times its financial consequences.

risky

Generally, diversification helps reduce the overall credit risk exposure for financial institutions by reducing their overall expected chargeoff rates.

Incorporated. An un-incorporated business leaves the owner(s) individually liable (including their personal assets) to financial exposure and liability. An incorporated enterprise limits the financial exposure to only those assets allocated to the business, and protects the owners personal assets.