True/False. (2 points each) Write “T” if the statement is

  

True/False. (2 points each) Write T if the statement is true and F if the statement is false1. There are 4 corporate levels of Risk Management. ____2. Subjective risk does not refer to the mental state of someone who experiences doubt as to the outcome of a given event. ____3. Objective Risk= Probable variation of actual from expected lossesExpected Losses ____4. Pure risk exists when there is no uncertainty as to whether a loss will occur. ____5. The principle of subrogation grows out of the principle of indemnity. ____6. Profits determine the investors rate of return. ____7. Market risk is non-diversifiable risk. ____8. If I go to a car dealer to see a Mustang, and I end up buying a Taurus this is called the collaborative effect. ____9. Brainstorming is a quantitative measurement tool. ____10. All measures with a frequency-reduction focus are called pre-loss activities.Multiple Choice (3 points each). Choose the one alternative that best completes the statement or answers the question.11. Which of the following is an example of loss controla) Separation b) Creditc) Reserve Fundsd) All of the above12. Which of the following types of risk is diversifiable?a) Company Risk b) Betagenic Riskc) Market Risk d) All of the above13. Which of the following does not describe shareholder diversification?a) Insurance Companies b) Stock Marketc) SBUs d) All of the above14. Which of the following is part of the Wrapped Model?a) Strategic Wrapper b) Synergy Wrapperc) Planning Wrapper d) Insurance Wrapper15. Problems of MNCs include:a) Global Control b) Cash management & positioning of fundsc) Managing Receivables d) All of the above16. Which of the following is not a step in the risk management decision-making process?a) Identify all significant risk that can cause lossb) Evaluate the potential frequency and severity of lossc) Understanding shareholder wealthd) Implement the risk management methods chosenFIN 415 Final ExamWhen finished, submit your answers via your Gradebook. DO NOT discuss this with anyother person this is your individual final exam!!For the multiple choice & true/false answers only submit the question numberand answerdo not include the question in your answer sheet. For otherquestions/problems, please show all of your work for full credit. One Excelattachment is preferred, otherwise be sure to show your work if you choose Worddo not send more than one attached file. Good luck!True/False. (2 points each) Write T if the statement is true and F if the statement is false1. There are 4 corporate levels of Risk Management. ____2. Subjective risk does not refer to the mental state of someone who experiences doubt as to theoutcome of a given event. ____3.Objective Risk= Probable variation of actual from expected lossesExpected Losses____4. Pure risk exists when there is no uncertainty as to whether a loss will occur. ____5. The principle of subrogation grows out of the principle of indemnity. ____6. Profits determine the investors rate of return. ____7. Market risk is non-diversifiable risk. ____8. If I go to a car dealer to see a Mustang, and I end up buying a Taurus this is called thecollaborative effect. ____9. Brainstorming is a quantitative measurement tool. ____10. All measures with a frequency-reduction focus are called pre-loss activities.Multiple Choice (3 points each). Choose the one alternative that best completes the statement or answersthe question.11. Which of the following is an example of loss controla) Separationb) Creditc) Reserve Fundsd) All of the above12. Which of the following types of risk is diversifiable? a) Company Riskc) Market Riskb) Betagenic Riskd) All of the above13. Which of the following does not describe shareholder diversification?a)Insurance Companiesb) Stock Marketc)SBUsd) All of the above14. Which of the following is part of the Wrapped Model?a) Strategic Wrapperb) Synergy Wrapperc) Planning Wrapperd) Insurance Wrapper15. Problems of MNCs include:a) Global Controlb) Cash management & positioning of fundsc) Managing Receivablesd) All of the above16. Which of the following is not a step in the risk management decision-making process?a) Identify all significant risk that can cause lossb) Evaluate the potential frequency and severity of lossc) Understanding shareholder wealthd) Implement the risk management methods chosenUsing the table below, calculate the following for 17 through 19 (10 points each):COUNTRYCONTRACT$/FOREIGN CURRENCYCanadadollarSpot.843730day90day.8417.8395JapanyenSpot30day90day.004684.004717.004781SwitzerlandfrancSpot30day.5139.5169 90day.531517.An American business needs to pay (a) 15,000 Canadian dollars, (b) 1.5 million yen,and (c)55,000 Swiss francs to businesses abroad. What are the dollar payments to the respectivecountries?18.An American business pays $20,000, $5,000, and $15,000 to suppliers in, respectively, Japan,Switzerland, and Canada. How much, in local currencies, do the suppliers receive?19. Compute the indirect quote for the spot and forward Canadian dollar, Japanese Yen, and Swissfranc contracts.20.You are considering a security with the following possible rates of return:ProbabilityReturn (%)0.300.150.250.309.512.015.016.0Calculate the expected rate of return and the standard deviation of the returns.21.ProbabilityReturn (%)0.150.300.400.15651114Calculate the expected rate of return and its standard deviation. One year Treasury bills arecurrently paying 8.9%. Should you invest in the above security?22. GAC Manufacturing, Inc. is considering several investments. The rate on T-Bills is currently 6.75percent, and the expected return for the market is 12 percent. What should be the required rates of returnfor each investment (Using the CAPM)? 12 points.SecurityBetaABCD1.400.750.801.20