EXAM STUDY MATERIALS 8/7/2024 11:29 AM
RMI2302 Exam 2 Practice Questions
With Correct Answers.
Incentive - answer✔✔Bill's Bookstore needs to restock textbooks for the upcoming semester.
Bill, the owner, decides to offer a monetary bonus based on how many books an individual
restocks. 10 textbooks = $1 bonus. This is an example of a(n):
Age Bias
Positive Reinforcement
Risk/Reward
Incentive
Overestimate future risk of a similar occurrence - answer✔✔People who live through a major
disaster will likely:
Be objective in assessing future risk
Underestimate future risk of a similar occurence
Feel relieved, because lightning never strikes twice in the same location
Overestimate future risk of a similar occurrence
Subjective - answer✔✔A bias can be described by which of the following views
Objective
Subjective
Tangible
Continuis
, EXAM STUDY MATERIALS 8/7/2024 11:29 AM
True - answer✔✔Age biases occur when people in different age groups interpret information
about risk differently. T/F
Experience - answer✔✔People who have experienced a low-probability/high-consequences
event tend to overestimate its likelihood. What type of bias does this describe?
Experience
Age
Probability
Projection
Incentive - answer✔✔What motivates an individual to make perform an action?
Risk
Reward
Bias
Incentive
False - answer✔✔Individuals and organizations measure risk/return with expected utility. T/F
The trade-off between risk and reward - answer✔✔The skill of critical decision making requires
an understanding of:
State Laws
Case law
The trade-off between risk and reward
The family medical leave act
Organizational Level Incentives - answer✔✔A company has noticed employees taking a lot of
sick time off around the flu season. They are concerned with the overall health of their
employees and don't want them to catch/spread the flu. The company begins offering free flu
shots for the employee and up to 4 family members. This is an example of:
Moral Biases
, EXAM STUDY MATERIALS 8/7/2024 11:29 AM
Individual Level incentives
Organizational Level Incentives
Financial Biases
Government Level Incentives
Long term cash flows are less valuable - answer✔✔As discount rates become higher:
Long term cash flows are more valuable
Long term cash flows are less valuable
The National Deficit is reduced
None of the above will occur
Discounting - answer✔✔Which of the following is a way organizations utilize opportunity cost
in their calculations?
Discounting
Estimating
Simulating
Projecting
Coercive - answer✔✔Eric must keep a B average, or else lose his starting position on the
basketball team. What type of incentive best describes this situation?
Financial
Coercive
Moral
Natural
Political incentives often increase the discount rate - answer✔✔Political incentives often do what
to the discount rate?
Political incentives often increase the discount rate
Political incentives often decrease the discount rate
RMI2302 Exam 2 Practice Questions
With Correct Answers.
Incentive - answer✔✔Bill's Bookstore needs to restock textbooks for the upcoming semester.
Bill, the owner, decides to offer a monetary bonus based on how many books an individual
restocks. 10 textbooks = $1 bonus. This is an example of a(n):
Age Bias
Positive Reinforcement
Risk/Reward
Incentive
Overestimate future risk of a similar occurrence - answer✔✔People who live through a major
disaster will likely:
Be objective in assessing future risk
Underestimate future risk of a similar occurence
Feel relieved, because lightning never strikes twice in the same location
Overestimate future risk of a similar occurrence
Subjective - answer✔✔A bias can be described by which of the following views
Objective
Subjective
Tangible
Continuis
, EXAM STUDY MATERIALS 8/7/2024 11:29 AM
True - answer✔✔Age biases occur when people in different age groups interpret information
about risk differently. T/F
Experience - answer✔✔People who have experienced a low-probability/high-consequences
event tend to overestimate its likelihood. What type of bias does this describe?
Experience
Age
Probability
Projection
Incentive - answer✔✔What motivates an individual to make perform an action?
Risk
Reward
Bias
Incentive
False - answer✔✔Individuals and organizations measure risk/return with expected utility. T/F
The trade-off between risk and reward - answer✔✔The skill of critical decision making requires
an understanding of:
State Laws
Case law
The trade-off between risk and reward
The family medical leave act
Organizational Level Incentives - answer✔✔A company has noticed employees taking a lot of
sick time off around the flu season. They are concerned with the overall health of their
employees and don't want them to catch/spread the flu. The company begins offering free flu
shots for the employee and up to 4 family members. This is an example of:
Moral Biases
, EXAM STUDY MATERIALS 8/7/2024 11:29 AM
Individual Level incentives
Organizational Level Incentives
Financial Biases
Government Level Incentives
Long term cash flows are less valuable - answer✔✔As discount rates become higher:
Long term cash flows are more valuable
Long term cash flows are less valuable
The National Deficit is reduced
None of the above will occur
Discounting - answer✔✔Which of the following is a way organizations utilize opportunity cost
in their calculations?
Discounting
Estimating
Simulating
Projecting
Coercive - answer✔✔Eric must keep a B average, or else lose his starting position on the
basketball team. What type of incentive best describes this situation?
Financial
Coercive
Moral
Natural
Political incentives often increase the discount rate - answer✔✔Political incentives often do what
to the discount rate?
Political incentives often increase the discount rate
Political incentives often decrease the discount rate
