Fin 415
Fin403 - FIN 415 Corporate Risk Management
FINAL EXAM
True/False (3 points each)
1.___F___ Risk management is an informal process that is used to identify risks.
2.___F___ there is no need to be concerned about intangible assets in a risk management plan.
3.____T__ during the risk identification process, risk symptoms are determined.
4.___T___ Risks can be assessed using quantitative and qualitative measures.
5.___T___ Brainstorming is a qualitative measurement tool.
6.___T___ When the Delphi technique of measuring risk is used; senior management is consulted with to determine their assessment of risk. Fin 403
7.__F____ the risk management tool of risk transfer, involves acting as if there is no risk.
8.__F___ Business risk is the variability in a firm’s earnings per share that is derived from its sales variability in conjunction with fixed operating costs.
9.__T___ the exposure to business risk may be reduced by portfolio diversification.
10.__F___ the two major categories of property are real property and business property.
Multiple choice (4 points each) Fin415
11. The country risk appraisal aims to identify all of the following external factors affecting an organization except;
a. political
b.financial
c. operational
d. economic
Fin 415
12. The utility theory places individuals into three categories of modeling behavior. They are; risk neutral, risk seeking and:
a. risk believing
b. risk manager
c. risk taking
d. risk averse
13. Diversification is the key to the management of portfolio risk because it;
a. shows investors how to make money quickly
b. allows investors to lower portfolio risk without adversely affecting return
c. totally eliminates risk
d. moves risk from one security to the other
Fin 415
FINAL EXAM
True/False (3 points each)
1.___F___ Risk management is an informal process that is used to identify risks.
2.___F___ there is no need to be concerned about intangible assets in a risk management plan.
3.____T__ during the risk identification process, risk symptoms are determined.
4.___T___ Risks can be assessed using quantitative and qualitative measures.
5.___T___ Brainstorming is a qualitative measurement tool.
6.___T___ When the Delphi technique of measuring risk is used; senior management is consulted with to determine their assessment of risk. Fin 403
7.__F____ the risk management tool of risk transfer, involves acting as if there is no risk.
8.__F___ Business risk is the variability in a firm’s earnings per share that is derived from its sales variability in conjunction with fixed operating costs.
9.__T___ the exposure to business risk may be reduced by portfolio diversification.
10.__F___ the two major categories of property are real property and business property.
Multiple choice (4 points each) Fin415
11. The country risk appraisal aims to identify all of the following external factors affecting an organization except;
a. political
b.financial
c. operational
d. economic
Fin 415
12. The utility theory places individuals into three categories of modeling behavior. They are; risk neutral, risk seeking and:
a. risk believing
b. risk manager
c. risk taking
d. risk averse
13. Diversification is the key to the management of portfolio risk because it;
a. shows investors how to make money quickly
b. allows investors to lower portfolio risk without adversely affecting return
c. totally eliminates risk
d. moves risk from one security to the other
Fin 415