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Tophat: RMIN 4000 Exam 1
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Tophat: RMIN 4000 Exam 1
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Tophat: RMIN 4000 Exam 1After graduating from UGA, you decide to buy a house as an investment
property. You plan to rent this house out and use rental payments to pay the
mortgage and generate some income for yourself. You plan to build equity
with these payments and ultimately sell the house at a profit. There is
always the possibility that tenants trash the house, that you're not able to
sell it for a profit, or that something happens to the house such as a fire. How
would you describe this endeavor? - -Pure and fundamental
Pure and particular
Speculative and fundamental
Speculative and particular
Speculative and systemic
- Bruce's friend Alfred is opening a restaurant and has asked Bruce to invest
$100,000. Alfred estimates that the restaurant has an 80% chance of failure,
where Bruce may lose his entire investment. Alfred also estimates that the
restaurant has a 20% chance of success, where Bruce will get back his
investment and gain another $200,000. Bruce decides to invest in the
restaurant. What can we say about Bruce's risk attitude with respect to this
decision? - -Bruce is risk averse
Bruce is risk neutral
Bruce is risk seeking
There is not enough information to answer this question
- Arctic Spas is a manufacturer of hot tubs. A fire at one of their factories
destroys their manufacturing equipment and they are not able to make hot
tubs for three months during the repairs. Many customers cancel their orders
after they are notified of the delay, leading to a loss of revenue for Arctic
Spas. What best describes the loss in revenue during the repair period? - -
Liability risk
Fundamental risk
Direct loss
Indirect loss
Physical hazard
Morale hazard
- Jon Snow is the Risk Manager for Night's Watch, a company that builds
security fences. Jon is conducting a risk assessment to identify the risk his
firm faces. All of their fencing materials are supplied by Targaryen, Inc. There
is some risk that Targaryen experiences a business interruption due to fire.
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