RMI NEW EXAM 2 WITH 100% CORRECTLY
ANSWERED QUESTIONS
The art of critical decision making requires knowledge of: - ANSWER the risk/ reward
trade-off
Sue is a very bright college student who keeps up with all of the news channels. Based
on the number of child abductions she has seen on the news lately, Sue insists that her
mother purchase a child harness for her younger brother. What type of bias is this? -
ANSWER Media
Which of the following is most likely to take added risk regardless of the amount of
reward associated with it - ANSWER Governments
Those who experience a major natural disaster are most likely to: - ANSWER
overestimate future risk of a similar occurrence
Which of the following actions describes how organizations use expected value? -
ANSWER Organizations estimate the future cash flows that are generated by an
investment and then discount them back to present value.
A lower cost of capital suggests an alternative is: - ANSWER safer
A bias can be described by which of the following? - ANSWER Subjective view
Which of the following is NOT a major bias we face in building models - ANSWER
location bias
Political incentives tend to do what to the discount rate - ANSWER political incentives
, raise the discount rate
which of the following is a means by which organizations make use of opportunity cost in
their decision-making - ANSWER discounting
A(n) ______ is an inclination of temperaments or outlook to present or hold a partial
perspectives at the expense of (possibly equally valid) alternatives in reference to
objects, people, or groups. - ANSWER bias
Eric must keep a B average, or else lose his starting position on the basketball team.
What type of incentive best describes this situation? - ANSWER Coercive
What is it that motivates an individual to undertake an action - ANSWER incentive
Which of the following describes politicians seeking re-election today:
I. Tend to focus on short term outcomes
II. Generally see spending today as more important than protecting cashflow for future
generations
III. Make decisions based on reducing the national debt - ANSWER I and II
If discount rates become higher: - ANSWER long term cash flows are less valuable
What are assets that are exposed to a loss if an individual lives a long life - ANSWER
savings, retirement and wealth
In defense of "smart" pills, Joshua Gowin frequently compares them to what other
cognitive enhancement - ANSWER caffeine
Which category probably faces the largest financial impact from premature death? -
ANSWER single wage earning adult with dependents
ANSWERED QUESTIONS
The art of critical decision making requires knowledge of: - ANSWER the risk/ reward
trade-off
Sue is a very bright college student who keeps up with all of the news channels. Based
on the number of child abductions she has seen on the news lately, Sue insists that her
mother purchase a child harness for her younger brother. What type of bias is this? -
ANSWER Media
Which of the following is most likely to take added risk regardless of the amount of
reward associated with it - ANSWER Governments
Those who experience a major natural disaster are most likely to: - ANSWER
overestimate future risk of a similar occurrence
Which of the following actions describes how organizations use expected value? -
ANSWER Organizations estimate the future cash flows that are generated by an
investment and then discount them back to present value.
A lower cost of capital suggests an alternative is: - ANSWER safer
A bias can be described by which of the following? - ANSWER Subjective view
Which of the following is NOT a major bias we face in building models - ANSWER
location bias
Political incentives tend to do what to the discount rate - ANSWER political incentives
, raise the discount rate
which of the following is a means by which organizations make use of opportunity cost in
their decision-making - ANSWER discounting
A(n) ______ is an inclination of temperaments or outlook to present or hold a partial
perspectives at the expense of (possibly equally valid) alternatives in reference to
objects, people, or groups. - ANSWER bias
Eric must keep a B average, or else lose his starting position on the basketball team.
What type of incentive best describes this situation? - ANSWER Coercive
What is it that motivates an individual to undertake an action - ANSWER incentive
Which of the following describes politicians seeking re-election today:
I. Tend to focus on short term outcomes
II. Generally see spending today as more important than protecting cashflow for future
generations
III. Make decisions based on reducing the national debt - ANSWER I and II
If discount rates become higher: - ANSWER long term cash flows are less valuable
What are assets that are exposed to a loss if an individual lives a long life - ANSWER
savings, retirement and wealth
In defense of "smart" pills, Joshua Gowin frequently compares them to what other
cognitive enhancement - ANSWER caffeine
Which category probably faces the largest financial impact from premature death? -
ANSWER single wage earning adult with dependents
