What term refers to the potential for financial loss in a business?

The term that refers to the potential for financial loss in a business is "Business Risk." This concept encompasses various factors that could lead to a decline in profits or negative performance, including operational issues, changes in market conditions, and competition. Business risk is inherently tied to the nature of the business itself and can arise from internal operations or external environments.

Investment risk, by comparison, generally pertains to the uncertainty regarding the returns on investments made, rather than the operational aspects of running a business. Market exposure is more focused on how fluctuations in the market can affect a company's asset value and doesn’t directly refer to the broader financial losses a business might face. Capital risk relates specifically to the potential loss of an investor's capital, which is limited to investment scenarios rather than the overall risk associated with operating a business.

In summary, the appropriate term that encapsulates the financial vulnerabilities a business faces is business risk, making it the most fitting answer among the options provided.