PORTFOLIO MANAGEMENT-TRIAL QUESTIONS 1) Explain the following terms as used in Portfolio management and give examples and/or furmulas. What do you think is the most important aspect of international risk management for a manager? It includes communications as well. a. What are the differences between credit risk, market risk, and operational risk? Read each question carefully and note your answers… You are considering investing in Ford Motor Company. \\ Credit checking customers is an example of a risk reduction strategy. Below are sample questions of the type to be found in the INSSA Security Risk Management Professional - Country Certification exam. Risk reduction. Moreover, known risks change their Impact and Probability with changes on a project. The risk per unit of return is measured by the a) standard deviation. When you’re done, you can scroll down (don’t cheat!) A) Explain why the impact of changes in coinsurance rates on demand depends on the elasticity of demand. During the Qualitative Risk Analysis, you assess Impact and Probability of a risk using simple grades like Low, Medium, High. Explain the types of risk that financial institutions use in order to set interest rates on s... We can be sure that a person is risk averse if: a. View Test Prep - operational-risk-management-exam-questions-and-answers.pdf from DAKAR 1 at University of California, Berkeley. Hedging reduces risk by: A. holding assets with negatively correlated returns so that totality portfolio return variability is reduced. Becky Fenton has 25/50/25 automobile insurance coverage. A. c. keeping dividend levels relatively high. c. Improved Communications. Characterize the investment objective given below as one of the following: an absolute risk objective, a relative risk objective, an absolute return objective, or a relative return objective. Learn vocabulary, terms, and more with flashcards, games, and other study tools. True b. The KMV model produces a measure called Expected Default Frequency. What term refers to the uncertainty inherent in projections of future ROIC? A) What is the major advantage of using the technique of avoidance in a risk management program? The primary purpose of life insurance is to provide: a. financial security for dependents in the event of death. Risk data quality assessment evaluates the degree to which the data about individual project risks is accurate and reliable as a basis for qualitative risk analysis. Which risk index is not used to facilitate clinical decision making when there is information about two dichotomous variables? What other factors besides operating leverage can affect a firm's business risk? I did the questions above and got 8 wrong answers out of 100. knowing that I have already read the PMBOK around 3 times and now going through the PM Study Circle. a. It means they tolerate little risks to the Project Schedule. Answer … © copyright 2003-2020 Study.com. c. Explain the meaning of securitization of risk. Which of the following is a Qualitative risk assessment? Which is false regarding COSO's definition/explanation of risk appetite? Dottie had a shop in which she made wind chimes for her business. The mean co variance B. the standard deviation C. The coefficient of optimization D. The s... Is the distribution of market and residual risk noticeably different for the individual stocks versus the EW portfolio? Which statistical measure is helpful to estimate the risk associated with an individual company's return? a. variance/mean b. standard deviation/mean c. standard deviation x mean d. variance x mean. The likelihood of experiencing an adverse effect is called: a. Explain the difference between systematic and unsystematic risk. A stock has an expected return of 12 percent, the risk-free rate is 5 percent, and the market risk premium is 7 percent. Prevention of risk events B. (a) Identified Risks. 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