Risk Management - CPA Business Environment and Concepts (BEC)

Card 0 of 6

Question

Probability (risk) analysis is:

Answer

Probability analysis is an extension of sensitivity analysis.

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Question

Which of the following factors is inherent in a firm's operations if it utilizes only equity financing?

Answer

Business risk represents the risk associated with the unique circumstances of a particular company, as they might affect the shareholder value of that company.

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Question

If an investor's certainty equivalent is greater than the expected value of an investment alternative, the investor is said to be:

Answer

If an investor's certainty equivalent is greater than the expected value of an investment alternative, the investor is said to be risk seeking.

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Question

The mission and vision of an organization most closely relate with its:

Answer

Mission and vision are keywords associated with a firm's strategy.

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Question

The performance component of COSO's ERM framework is supported by which of the following principles?

Answer

Identifies risk is included under the umbrella of performance.

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Question

Proper risk management includes all of the following except:

Answer

While choosing to compensate workers additionally is a good faith action, it does not assist in proper risk management.

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