It refers to a position when a company is unable to meet its fixed financial charges namely interest payment, preference dividend and repayment obligation. It is known as:

The correct option is Financial Risk.

Step-by-step Explanation:

1. Understanding Fixed Financial Charges:
When a company raises capital through debt (such as loans or bonds) or preference shares, it commits to making fixed, mandatory payments. These obligations include interest payments, the eventual repayment of the principal amount, and preference dividends. These charges must be paid regardless of the company's earnings or financial performance.

2. Defining Financial Risk:
Financial risk is the uncertainty or risk that a company will not be able to generate enough cash flow to meet these fixed financial obligations. When a company relies heavily on debt financing (leverage), its financial risk increases. Failure to meet these commitments can lead to legal action by creditors, technical insolvency, or bankruptcy.

3. Why Other Options Are Incorrect:
- Business Risk: This refers to the risk inherent in the company's operational activities, such as fluctuations in sales volume, input costs, and competition, which affect its operating profit before financing costs are considered.
- Operating Risk: This is the risk associated with the fixed operating costs of running the business (like rent, salaries, and utility bills) rather than its financing structure.
- Systematic Risk: This is the macroeconomic or market-wide risk (such as inflation, interest rate fluctuations, or political instability) that affects the entire market and cannot be eliminated through diversification.