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Pregunta 1
Pregunta
Which of the following would be the BEST motivator for outsourcing information technology (IT) systems?
Respuesta
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Internal IT resources are stretched
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IT is regarded as a core strategic need
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There is high risk of compromising confidentiality of information held on the IT system.
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There is high risk of the cost of systems maintenance compromising other business objectives.
Pregunta 2
Pregunta
Reducing risk without any impact on business cash flows is most likely to
Respuesta
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Decrease investors' required rate of return
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Decrease the Enterprise Value
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Decrease the PV of expected future business cash flows
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Increase the cost of capital
Pregunta 3
Pregunta
Under CAPM, diversifiable risk: ( two answers )
Respuesta
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Is also referred to as systematic risk. (systematic risk: affect all sectors)
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Is a sector-specific but NOT firm-specific
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Is unavoidable for most businesses
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Affects share prices
Pregunta 4
Pregunta
Which of the following statements is true?
Respuesta
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Risk seeking investors expect a positive correlation between risk and expected return.
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Risk is an inevitable result of being in business
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Minimising all risk should be a key objective for all firms
Pregunta 5
Pregunta
For a retail company, the possible loss of sales due to heavy snow forecast next week is best described as:
Respuesta
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Risk
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Volatility
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Uncertainty
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Pre-transactio exposure
Pregunta 6
Pregunta
Lower borrowing interest costs will usually be achieved by:
Respuesta
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Increasing gearing
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Accepting restrictive loan covenants
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Bootstrapping
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Actively pursuing riskier business rather than higher return
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Making a special dividend payment
Pregunta 7
Pregunta
The average risk free interest is 2%. The FTSE world index returned minus1% last year, and similar poor equity returns are forecast for the coming year. Over the longer term, it is expected that the market risk premium will be 6%.
A company has a beta of one. Under CAPM, the company's cost of equity is?
Respuesta
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Minus 1%
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1%
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3%
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3.5%
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8%
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