《现代财务管理》 (美)麦克圭根(McGuigan,J.R) Moyer Instructor TestBank TB21.docVIP

PAGE 414 ? Chapter 21/Risk Management Chapter 21/Risk Management ? PAGE 413 PAGE 408 Chapter 21 Risk Management MULTIPLE CHOICE 1. Which of the following statements about risk is/are correct? I. Risk is the possibility that the actual cash flows will be different that the expected cash flows. II. Risk management is utilized by companies in order to provide a chance to make a quick profit. a. I only b. II only c. Both I and II d. Neither I nor II ANS: A OBJ: TYPE: Fact TOP: Introduction 2. Currency and commodity price volatility is a component of which of the following types of risk? a. Systematic risk b. Unsystematic risk c. Operational risk d. Non-diversifiable risk ANS: B OBJ: TYPE: Fact TOP: Managing risk 3. The most important reason to hedge business risk is to: a. reduce the chance of a business takeover. b. reduce employee theft. c. reduce management inaccuracies. d. reduce the chance of financial distress ANS: D OBJ: TYPE: Fact TOP: Managing risk 4. All of the following are reasons to reduce financial distress EXCEPT: a. enhanced debt capacity. b. reduced WACC. c. better currency exchange ratio. d. ensure adequate cash flows. ANS: C OBJ: TYPE: Fact TOP: Managing risk 5. Which of the following is/are a company’s largest risks? I. exchange rate risk II. future raw material price risk a. I only b. II only c. Both I and II d. Neither I nor II ANS: C OBJ: TYPE: Fact TOP: Managing risk 6. Which of the following is a related benefit of hedging external risks for a company? a. Management can determine international markets for their product. b. Management can forecast political events that may impact their sales. c. Management can focus on performance and compensation factors that are under their control. d. Management can determine the economic forces that will impact their earnings. ANS: C OBJ: TYPE: Fact TOP: Managing risk 7. Which of the following statements about hedging of business risks by investors is/are correct? I. Operational