C-05 — Risk and Uncertainty

The possibility of actual results to be different from the expected results is known as —

A company expected a return of 20% but earned only 15%. The 5% deviation represents —

Uncertainty in personal life and business arises mainly because events are related with —

Rohan expects GPA 5 in his SSC examination. This expectation is an example of —

An investor expected 15% dividend but received 20% instead. The extra 5% is considered —

Investment A returned 10% each year for three years. Investment B returned 5%, 10%, and 15% over the same period. Both have the same average return of 10%. Which is correct?

The higher the volatility of return, the —

Where there is no volatility in the rate of return, there is —

Mr. Rashed, a farmer, expects a good harvest. The uncertainty he faces is mainly related to —

Risk plays an important role in —

The part of uncertainty that can be measured is called —

The sudden death of a company's Chief Executive Officer is an example of —

Which of the following can be controlled by applying different techniques?

Destruction of an office building by an earthquake is an example of —

The possibility that a firm's sales will decline next year is —

Selling products in advance is a step taken to reduce —

Consider the following statements about risk and uncertainty:

Only the possibilities of occurring _____ events are considered as risks.

Sources of risk in the textbook are discussed from how many perspectives?

Which of the following is NOT an operating cost mentioned in the chapter?

Business risk arises from the inability of a firm to meet its —

The proportion between fixed and variable costs of a firm affects mainly its —

High fixed operational costs such as rent and insurance lead to —

If a firm collects funds only from internal sources, the risk related to its earnings is called —

Sources of business risk include —

Financial risk is mainly created from —

A firm that has collected a high amount of capital through loans is more exposed to —

Financing from internal sources does NOT obligate the firm to —

A company sells bonds worth Tk. 50 lakhs at 15% interest with a 5-year maturity. The annual interest payable is —

In the same bond example, the principal payable at the end of 5 years is —

If a company cannot repay its debt for a long period, creditors may —

The risk arising from the inability to repay debt obligations is known as —

Investors who buy bonds and debentures primarily face —

If market interest rate increases, the market value of bonds and debentures —

If market interest rate decreases, the market value of bonds and debentures —

Liquidity risk refers to the inability to sell investments —

Liquidity risk is generally higher for —

Why is liquidity risk usually low when an investor buys shares of a listed company?

Bond and debenture investors face liquidity risk because —

If a company anticipates future conditions and takes necessary measures, it can avoid —

A company set up its plant by a river only for transport convenience and the plant was destroyed by flood. This shows —

Earning profit by a business organization mainly depends on —

An umbrella firm overproduced predicting heavy rainfall but actual rainfall was less. This illustrates the risk of —

Adding more products to the production line is a way to reduce —

Risk has been defined as the probability of experiencing —

Before starting a business, a firm should mainly —

For a risk-free return, the actual return is —

Which of the following is generally considered risk-free?

Why are treasury bills considered risk-free?

A time deposit kept in a bank usually generates —

Which return is recognized as the most risky?

Returns from common stock are considered risky because —

The formula for the average/expected rate of return is —

Generally, one part of an investment return is risk-free and the other part is —

Risk can be measured by measuring the deviation of actual return from —

The higher the deviation of actual return from expected return, the —

The statistical method used in this chapter to measure risk is —

In the standard deviation formula for a sample, the divisor is —

Variance is obtained by —

Standard deviation is equal to —

In the textbook example (returns 20%, 5%, -5%, 15%, 30%), the average return is —

In the same example, the standard deviation is —

In the example, the total of squared deviations is —

In the example, the variance equals —

Project A offers 13% return with 13.5% SD; Project B offers 13% return with 15% SD. Which is preferable?

When two projects carry the same risk, the project with the —

The general decision-making principle under risk is —

What is the consequence of inability to pay office expenses, insurance etc.?

In which of the areas of business organizations does risk play a significant role?

Risk is measured by —

Mr. Hasan, a garment manufacturer, took a bank loan to produce more winter clothes for higher profits. But the clothes remained unsold and he is struggling to pay loan interest, wages and shop rent. What types of risk has Mr. Hasan faced?

In Mr. Hasan's situation, the most appropriate action is to —

The 5-year returns of Mr. Rubel's 'Biva' project are 10%, 22%, 6%, −5% and 5%. The average return is —

The approximate standard deviation of Mr. Rubel's 'Biva' project is —

Comparing Mr. Rubel's 'Biva' project (avg return ≈ 7.6%, SD ≈ 9.8%) and 'Luba' project (avg 5%, SD 15%), Mr. Rubel should —

From the perspective of a business organization, the main type of risk in Mr. Rubel's 'Luba' project (financed by a 12% bank loan) is —

The statement "Not all uncertainties are risks" is true mainly because —

Liquidity risk of sole proprietorship and partnership firms is higher than that of companies because —

Bond and debenture investors mainly face —

Risk in business is mainly measured by —

Actual results may be less than expected in business mainly because of —

Liquidity risk exists because —

Risk-free return is best described as —