TOPIC 2

Descrição

FRM FRM Quiz sobre TOPIC 2, criado por f.yafai em 26-10-2013.
f.yafai
Quiz por f.yafai, atualizado more than 1 year ago
f.yafai
Criado por f.yafai mais de 10 anos atrás
21
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Resumo de Recurso

Questão 1

Questão
Which of the following would be the BEST motivator for outsourcing information technology (IT) systems?
Responda
  • Internal IT resources are stretched
  • IT is regarded as a core strategic need
  • There is high risk of compromising confidentiality of information held on the IT system.
  • There is high risk of the cost of systems maintenance compromising other business objectives.

Questão 2

Questão
Reducing risk without any impact on business cash flows is most likely to
Responda
  • Decrease investors' required rate of return
  • Decrease the Enterprise Value
  • Decrease the PV of expected future business cash flows
  • Increase the cost of capital

Questão 3

Questão
Under CAPM, diversifiable risk: ( two answers )
Responda
  • Is also referred to as systematic risk. (systematic risk: affect all sectors)
  • Is a sector-specific but NOT firm-specific
  • Is unavoidable for most businesses
  • Affects share prices

Questão 4

Questão
Which of the following statements is true?
Responda
  • Risk seeking investors expect a positive correlation between risk and expected return.
  • Risk is an inevitable result of being in business
  • Minimising all risk should be a key objective for all firms

Questão 5

Questão
For a retail company, the possible loss of sales due to heavy snow forecast next week is best described as:
Responda
  • Risk
  • Volatility
  • Uncertainty
  • Pre-transactio exposure

Questão 6

Questão
Lower borrowing interest costs will usually be achieved by:
Responda
  • Increasing gearing
  • Accepting restrictive loan covenants
  • Bootstrapping
  • Actively pursuing riskier business rather than higher return
  • Making a special dividend payment

Questão 7

Questão
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?
Responda
  • Minus 1%
  • 1%
  • 3%
  • 3.5%
  • 8%

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