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5Points Quiz

Which one is not a way of avoiding or reducing risk?

        A.   Taking appropriate measures involving additional expenditure

        B.   Turn risk into regular costs by pooling them with large numbers of similar risks

        C.   Turn risk into regular costs by pooling them with large numbers of similar risks

        D.   Choosing a completely different course of action or alternative

Answer: D

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Define Political Risk

        A.   The danger inherent in partisan politics

        B.   These are risks of losses as the result of unforeseen intervention by governments.

        C.   The dangers inherent in military incursion into politics

        D.   The consequences of a loss of election by a political party

Answer: B

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Economic risks include the follwing except

        A.   damage to physical goods

        B.   the chance of fall in demand for the product

        C.   the risk that potential purchasers may be prevented from buying by a shortage of finance

        D.   the risk of an inadequate supply of the resources needed to make the product planned

Answer: A

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What does Technical Risk measure?

        A.   The chance that the competence of workers may be doubtful and not reach required standard

        B.   The chance the technicians will be incompetent

        C.   The chance of a mechanical breakdown

        D.   Possibility of technical deficiency in the process

Answer: A

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Which is not a common risk in Finance?

        A.   Physical risk

        B.   Future risk

        C.   Technical risk

        D.   Political risk

Answer: B

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Liquidity of an enterprise is affected by

        A.   the management skills of the board of directors

        B.   the level of management of current asset

        C.   the level of management involvement

        D.   the astituteness of the Finance Manager

Answer: B

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What is dividend-payout ratio?

        A.   The proportion of profits paid as interest on loan

        B.   The proportion of profits retained

        C.   The proportion of profits

        D.   The proportion of profits distributed as dividend

Answer: D

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The capital structure is said to be optimum

        A.   when the market value of shares is maximized

        B.   when there's a balance between short-term and long-term financing

        C.   when equity is higher than debt

        D.   when individual financing is atop public funding

Answer: A

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