Discuss the following statement: “A project may not be very riskyin spite of its high sensitivity to certain variables.”

Q: Are you agree with the phrase (sentence): "In the following case, A risk aversion person will not…

A: A person is said to be a risk averse person, when he prefers lower returns with known risk in…

Q: Describe how underinvestment and asset substitution can destroy firm value and how risk management…

A: Underinvestment and asset replacement can have a negative impact on a company's value, however risk…

Q: How does the Broader Diversification Reduce Risk?

A: Portfolio is a pool of different investments/assets. Investors can categorize the risks in two…

Q: a. An organization may accept the risk if it is prepared to absorb or mitigate the impact of the…

A: The risk response's purpose is to develop an organization-wide, uniform response to the risk frame.…

Q: CFDs are more useful for speculation and not really useful for hedging? Do you agree

A: Contact for difference is a financial derivative which is an agreement to exchange the difference in…

Q: Is a method of screening out in certain situations an unacceptable investment alternative?

A: Capital budgeting is the technique that is used in business to determine the best investment…

Q: Discuss how diversification reduces firm specific risk.

A: Diversification is investing money in many investments rather than a single investment. In…

Q: Are you agree with the phrase (sentence): "In the following case, person who prefer project B to…

A: ENPV of Project A is 100 ENPV of project B is 120 Standard deviation of Project A is 15  Standard…

Q: Are you agree with the phrase(sentence): "In the following case. a risk aversion person will not…

A: In the above question we are given ENPV which means expected net present value from a project and…

Q: 1. What is a risk you aren't being paid to take?

A: Risks in simple words is a condition wherein a person ability is judged to take a decision which may…

Q: What outcomes are possible with speculative risk?​

A: Speculative risk is a form of risk in which the outcome is unknown and there is a chance of both…

Q: What are some actions that companies can take tominimize or reduce risk exposures?

A: The following are the actions utilized by companies to reduce exposure of risk: A company can…

Q: What is takaful and how it can be used as a risk mitigation tool and write down the names of types…

A: Takaful may be a style of monotheism insurance whereby members contribute cash into a pool system to…

Q: o, what about point 4 & 5  please in question  Which alternative is considered to be riskier, all…

A: Debt and Equity mix or only equity are the forms of capital structure which is chosen by the entity…

Q: A project with a negative NPV should be rejected. O True O False

A: Net present value  = present value of future cash inflows discounted at desired rate of return -…

Q: The board of directors of AMSB are confused between IRR and NPV. Briefly discuss the Internal Rate…

A: The internal rate of return method is a capital budgeting method which helps in finding out the rate…

Q: The following questions/inquiries can be used in determining risk, EXCEPT:

A: Before the risk assessments, asking questions is important. This help us to understand the situation…

Q: minimize overall risk

A: A manager has to make different decisions related to choosing a project.  A project giving a higher…

Q: What happens when Control Risk is below the maximum level?

A:

Q: How can break-even analysis be helpful in evaluating project risk

A: Break even analysis helps us in determining that level of sales at which the company is at a point…

Q: How do companies manage risk? What are the factors that contribute to a high-risk project?

A: In business there must be ups and downs in their business surroundings.  In every business there…

Q: Explain the term Flaws in Project Ranking by IRR?

A: Answer: IRR is nothing but an internal rate of return; it is the rate of discount which makes a…

Q: What kind of investment is considered to be risk-free?

A: A risk-free investment is an investment that has a minimum or no fluctuation from the expected…

Q: Anticipate TWO (2) drawbacks from the adverse selection on financial safety nets.

A: Financial Safety Nets- A financial safety net is not one savings account or an insurance guideline.…

Q: Do maturity models neglect ambiguities and uncertainties of projects or do they do just the…

A: The maturity model helps to evaluate the capability of an organisation. It also determines how…

Q: the strengths o

A: Strengths of  scientific approach  Researchers employing survey methods to collect data enjoy a…

Q: When conducting a technical risk assessent, which of the following is true? project structure is…

A: When conducting a technical risk assessment, the level of project structure is a significant factor…

Q: sensitivity analysis as determined by NPV Breakeven sensitivity.  H

A: Sensitivity analysis refers to the model of finance that is helpful in determining the target…

Q: When we perform sensitivity analysis for mutually exclusive alternatives, itmay be more effective to…

A: Net present worth is acknowledged as the current worth or value of a project which is adjusted as…

Q: What should occur when a low level of Detection Risk is acceptable?

A: Detection risk is the risk that procedures performed to reduce audit risk will not detect a material…

Q: What are the differences between bottom-up and top-down approaches to security valuation? What are…

A: A top-down method to security evaluation starts with an examination of the worldwide and national…

Q: Explain about the Hedging against fair value risk.

A: Financial instrument:   It is a monetary contract between two parties which acts as an evidence of…

Q: George wants to calculate risk using risk assessment matrix ,should he assess for the worst credible…

A: Risk assessment matrix is a method used for finding the risk. This method prioritizes the risk by…

Q: The project with the highest IRR may not be the preferred alternative. To illustrate the flaws of…

A: Internal Rate of Return (IRR) is that discounting rate at which Net Present Value of the project is…

Q: Explain why diversification reduces unsystematic risk but not systematic risk.

A: Diversification is a strategy used in investing where a variety of assets or securities are combined…

Q: How can we determine whether the project under consideration is of normal risk?

A: Introduction: Risk is nothing but the variation in real returns obtained as opposed to expected…

Q: Explain Broader Diversification Reduces Risk?

A: The investment in different financial assets is known as the portfolio of an investor. The…

Q: We manage risk so we know which risks are worth taking.

A:

Risk Management Techniques

Risk management is the procedure of recognizing, analyzing, monitoring, and preventing the risks and threatening factors of investments and business. Risks can arise from various factors including internal controls, market changes, natural disasters, and failure in productions. Risk management techniques enable entities to control and minimize the risks as well as the threatening factors of the business and it also helps to improve the business.