Financial Planning II 1.01

When Bob covers the windows of his deli with plywood to protect them from approaching hurricane winds, what is he trying to do with the risk?

• accept

• analyze

• mitigate

• transfer

The two dimensions of risk are:

• impact and avoidance

• probability and impact

• probability and avoidance

• mitigation and acceptance

A good source of information about the retroactive risks of a business would be a/an:

• environmental scan

• purchasing manager

• business incident log

• local weather forecast

Which is often used to measure and rate potential risks?

• an environmental scan

• transference strategies

• an impact/probability chart

• contingency and fallback plans

What category of risk typically has the most impact on the ability of a business to reach planned goals and objectives?

• financial

• hazard

• operational

• strategic

Which statement accurately describes the nature of prospective risks?

• They are typically more common than retroactive risks.

• They are usually easier to identify than retroactive risks.

• They have failed to happen before but could occur in the future.

• They have occurred in the past so they will fail to reoccur in the future.

Fiona uses her generator to keep her restaurant open during a power outage so she can serve hot meals to the community. She is turning her risk into a strategic advantage by indicating she is:

• risk-averse

• risk-seeking

• risk-tolerant

• risk-accepting

Lilly's Laundry had a washer malfunction that flooded the business, causing it to close for three weeks. What kind of risk is this?

• financial

• operational

• pure

• speculative

An external financial risk that Martha might face in her watch repair business is:

• poorly made products

• significant accounting errors

• poor budgeting and planning

• a change in currency exchange rates

Bradley owns a local hardware store and decides to close early because it is snowing. He is worried that customers might slip and fall around his shop or his employees might wreck their cars driving home. By closing early, how is Bradley handling these risks?

• by avoiding them

• by accepting them

• by mitigating them

• by transferring them