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In this file of FIN 415 Final Exam you will find the next
information:
Section 1
1. The art of risk management is to identify risks specific to
an organization and to respond to them in an appropriate
way.
2. All levels of an organization do not need to be included in
the management of risk in order for it to be effective.
3. Qualitative Risk Analysis Techniques seek to compare the
relative significance of risk facing a project in terms of the
effect of their occurrence on the project outcome.
4. Quantitative techniques are used when the likehood of the
investment or project achieving its objectives with time and
budget is required.
5. A forward exchange contract requires delivery at a
specified future date of one currency for a specific amount of
another currency.
6. Risk tolerance is the degree that one is willing to risk losing
some of his original investment in exchange for a chance to
earn a higher return.
Section 2
Our new start up company has created a new product that
we think we do a fantastic job, but our job as risk managers is
to calculate what could happen if things do not work out.
What is the expected value of profits in the following
scenario:

2. Section 3
1. Which of the following best describes risk management?
a. A formal process to identify risks.
b. A formal process to assess, identify and manage risk.
c. A formal process to cover up mis-management.
d. A formal process by the Board to direct operating
activities.
e. None of the above.
2. Which of the following are soft benefits of risk
management?
a. Enhancement of team spirit.
b. Proper risk allocation.
c. Improved Communications.
d. Improved Profits.
e. a and c.
3. What is the Delphi technique?
a. Consulting with a subject matter expert on the topic.
b. Consulting with senior management on a topic.
c. Used when assessing risk.
d. Consulting with the Board of Directors on a topic.
e. None of the above.
4. Which of the following are tools to manage risk?
a. Time value of money.
b. Qualitative.
c. Quantitative.
d. b c.
e. None of the above.
5. Risk management is an essential part of the project and
business planning cycle which requires which of the
following:
a. Requires less strategy and more imagination and ingenuity.

3. b. Generates an unstructured response to risk in terms of
alternative plans, solutions, and contingencies.
c. is a thinking process requiring poor imagination and a lack
of ingenuity.
d. requires acceptance that uncertainty exists.
e. generates an unrealistic attitude in an investment for staff
by preparing them for risk events rather than being taken by
surprise when they arrive.
6. Market risk refers to:
a. The chance that a business may not find underwriters.
b. The chance that a firm's product/service will not be
successful in the market.
c. Gains or losses from secondary market sales due to general
movements in financial markets.
d. The chance that the issuer of a financial instrument will
make some bad decisions that are adversely affects it
operations.
e. All of the above.
7. The proposed risk management assessment system will do
all of the following, except:
a. Identify possible future markets.
b. Identify and manage risk.
c. Adjust strategy to respond to risk.
d. Increase changes of project and business success.
e. Ensure stock price increases.
8. Key components of program management include which of
the following:
a. Organizational management.
b. Capital budgeting technique application.
c. Resource maximization.
d. Time-series analysis.

4. e. Monte Carlo Simulation.
9. Which of the following are outputs of risk identification
a. Historical Information
b. Risk Symptoms.
c. Product or service descriptions.
d. Eliminated from the process.
e. None of the above.
10. Country risk analysis involves assessing which of the
following?
a. Economic risk.
b. Political risk.
c. Government risk.
d. Cultural risk.
e. All of the above
11. Monte Carlo simulation does which of the following?
a. Gives you a practical, virtual simulation
p>b. Does not produce a mathematical model.
c. Produces a mathematical model.
d. a b.
e. b c.
12. Which of the below is the best definition of business risk?
a. The variability in a firm's earnings per share that derives
from its sales variability in conjunction with fixed interest
costs and debt service.
b. The chance that a business firm will not be able to repay a
loan.
c. The chance that paying the interest due to a firm's
creditors will result in losses to its bond holders
d. The variability in a firm's earnings per share that derives
from its sales variability in conjunction with fixed operating
costs.

5. Business - Finance
1 The art of risk management is to identify risks specific to an
organization and to respond to them in an appropriate way.
2 All levels of an organization do not
need to be included in the management of risk in order for it
to be effective. 3 Qualitative Risk
Analysis Techniques seek to compare the relative significance
of risk facing a project in terms of the effect of their
occurrence on the project outcome. 4
Quantitative techniques are used when the likehood of the
investment or project achieving its objectives with time and
budget is required. 5 A forward
exchange contract requires delivery at a specified future date
of one currency for a specific amount of another currency.
6 Risk tolerance is the degree that one is willing to risk
losing some of his original investment in exchange for a
chance to earn a higher return. Our new
start up company has created a new product that we think
we do a fantastic job, but our job as risk managers is to
calculate what could happen if things do not work out. What
is the expected value of profits in the following scenario:
1. Which of the following best describes risk
management? 2. Which of the following are
soft benefits of risk management? 3 What is the
Delphi technique? 4 Which of the following are
tools to manage risk? 5 Risk management is an
essential part of the project and business planning cycle
which requires which of the 6 Market risk refers
to: 7 The proposed risk management assessment
system will do all of the following, except: 8 Key

6. components of program management include which of the
following: 9 Which of the following are outputs of
risk identification 10 Country risk analysis
involves assessing which of the following? 11
Monte Carlo simulation does which of the following?
12 Which of the below is the best definition of ...
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