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Uncertainty & Risk Free Rate

Authored by Joval Farras

Business

University

Used 2+ times

Uncertainty & Risk Free Rate
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10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

There is a chance that more than one result will emerge in an uncertain situation, but it is unknown how likely each result will be.

True

False

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Risk relates to a circumstance where we can describe all the outcomes that will occur and their corresponding probabilities, whereas uncertainty refers to a condition where the probability of this occurrence is unknown.

True

False

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In the taghir situation, only one party—for example, only the buyer or only the seller—experiences incomplete information that is known to only one party.

True

False

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Tadlis happens because both parties have access to insufficient information (both buyers and sellers). As a result, the Taghrir case happens if both parties are involved in a situation that is unknown (uncertain to both parties)

True

False

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

There are multiple outcomes or events that could happen in a situation of certainty, each with a different probability.

True

False

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Natural Uncertainty In business, contracts are agreements that guarantee payment predictability in terms of both amount and timing. Because both parties who transact at the beginning of the contract have agreed upon it, the cash flow can be predicted with a fair amount of certainty.

True

False

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Natural certainty Contracts are agreements made in business that lack a guarantee of payment (in terms of amount and time). The rate of return may be zero, negative, or positive.

True

False

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