GRP5 FINA7CR

1.      What is risk management and what is the aim of it ?

• Risk management is the process of identifying, evaluating, and controlling risks to an organisation’s profits and resources. The aim of risk management limit possible financial liabilities, decrease the cost of risk, maximize return on investment, and preserve assets from loss/damage

• Risk management is the process of identifying, and controlling risks to an organisation’s profits and resources. The aim of risk management limit possible financial liabilities, maximize return on investment, and preserve assets from loss/damage

• Risk management is the process of identifying and evaluating risks to an organisation’s profits and resources. The aim of risk management limit possible financial liabilities, decrease the cost of risk, , and preserve assets from loss/damage

• Risk management is the process of evaluating, and controlling risks to an organisation’s profits and resources.The aim of risk management limit possible financial liabilities, decrease the cost of risk and maximize return on investment

2. Mitigating potential losses is the definition of

• Risk-retention

• Risk transfer

• Risk avoidance

• Risk reduction

3. Which of the following is not a reason for business failure ?

• responding appropriately to changes

• Lack of financing

• failing to understand customers.

• financial distress

4.      According to the company’s act financial distress is defined as

•   A company that will be unable to generate income to settle its debts as they are due and payable within the immediate twelve months .

• A company with a reasonable likelihood that it will become insolvent within the immediately ensuing twelve months. A company is technically insolvent if its liabilities are greater than its assets.

• A company that will be unable to generate enough income to settle its debts as they are due and payable within the immediate six months .

• A company with a reasonable likelihood that it will become insolvent within the immediately ensuing three months. A company is technically insolvent if its liabilities are greater than its assets.

5. Which of the following is a reason for financial distress ?

• Low fixed cost

• Poor budgeting

• Good management

• financial distress

6. How is a firm determined if it is in financial distress ?

• Falling Margin

• Extended payment dates

• Increase in interest payments

• All of the above

7. There is no difference between bankruptcy and insolvency (TRUE/FALSE)

8. What are consequences of financial failure in companies

• goodwill to suppliers

• Inefficiency in the sale of assets

• Goodwill to customers

• Effective ways to find financing

9.      How would you not deal with financial distress ?

• Having an effective management information system will ensure that the companies have accurate and timely information available at all times

• A financial forecast provides insight into the direction that the business is heading as per the management's plan

• Companies need to seek the advice of their accountants or business advisers during difficult times only

10.      What is a corporate manager?

• Practitioner employed to advise and oversee an organization through the development of risk management and is also liable for risk

• practitioner employed to only oversee an organization through the development of risk management and is also liable for risk

• practitioner employed to advise and oversee an organization through the development of risk management and is also liable for risk

• practitioner employed to advise and oversee an organization through the development of risk management