©THEBRIGHT EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
RMI Exam 2 Questions With Verified
Answers
The skill of critical decision making requires an understanding of: - Answers✔the trade-off
between risk and reward
Sue is a very bright college student who stays up to date on all the news channels. In response to
the number of child abductions she has seen on the news lately, she insists that her mother
purchase a child harness for her younger brother. What type of bias is this? - Answers✔Media
Which entity is most likely to take additional risk without regard to the amount of reward
associated with it - Answers✔Governments
People who live through a major natural disaster will likely: - Answers✔overestimate future risk
of a similar occurrence
Which of the following actions describes a way organizations use expected value? -
Answers✔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: - Answers✔safer
A bias can be described by which of the following? - Answers✔Subjective view
Which of the following is NOT a main bias we encounter when developing models -
Answers✔location bias
political incentives often do what to the discount rate - Answers✔political incentives increase the
discount rate
which of the following is a way organizations utilize opportunity cost in their calculations -
Answers✔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. - Answers✔bias
, ©THEBRIGHT EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
Eric must keep a B average, or else lose his starting position on the basketball team. What type
of incentive best describes this situation? - Answers✔Coercive
What motivates an individual to perform an action - Answers✔incentive
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 - Answers✔I and II
As discount rates become higher: - Answers✔long term cash flows are less valuable
What are assets that are exposed to a loss if an individual lives a long life - Answers✔savings,
retirement and wealth
In defense of "smart" pills, Joshua Gowin frequently compares them to what other cognitive
enhancement - Answers✔caffeine
Which category probably faces the largest financial impact from premature death? -
Answers✔single wage earning adult with dependents
______ is/are not designed to compensate the injured party for property damage or bodily injury
but to punish the individual or organization for their wrongful act - Answers✔Punitive Damages
In which age category do you face the highest risk of premature death? - Answers✔your 40s
The financial consequences of property risk include - Answers✔reduction in property value &
increases in expenses
Stimulant drugs, such as Adderall, are classified under which schedule for drug classification -
Answers✔Schedule 2
Which of the following is NOT of the five main categories of risk faced by individuals -
Answers✔Reputational
Poor financial planning by individuals may cause: - Answers✔a return to the workforce
following retirement
Causes of liability include: - Answers✔violations of statutory laws
violations of contract terms
negligent behavior
ALL RIGHTS RESERVED.
RMI Exam 2 Questions With Verified
Answers
The skill of critical decision making requires an understanding of: - Answers✔the trade-off
between risk and reward
Sue is a very bright college student who stays up to date on all the news channels. In response to
the number of child abductions she has seen on the news lately, she insists that her mother
purchase a child harness for her younger brother. What type of bias is this? - Answers✔Media
Which entity is most likely to take additional risk without regard to the amount of reward
associated with it - Answers✔Governments
People who live through a major natural disaster will likely: - Answers✔overestimate future risk
of a similar occurrence
Which of the following actions describes a way organizations use expected value? -
Answers✔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: - Answers✔safer
A bias can be described by which of the following? - Answers✔Subjective view
Which of the following is NOT a main bias we encounter when developing models -
Answers✔location bias
political incentives often do what to the discount rate - Answers✔political incentives increase the
discount rate
which of the following is a way organizations utilize opportunity cost in their calculations -
Answers✔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. - Answers✔bias
, ©THEBRIGHT EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
Eric must keep a B average, or else lose his starting position on the basketball team. What type
of incentive best describes this situation? - Answers✔Coercive
What motivates an individual to perform an action - Answers✔incentive
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 - Answers✔I and II
As discount rates become higher: - Answers✔long term cash flows are less valuable
What are assets that are exposed to a loss if an individual lives a long life - Answers✔savings,
retirement and wealth
In defense of "smart" pills, Joshua Gowin frequently compares them to what other cognitive
enhancement - Answers✔caffeine
Which category probably faces the largest financial impact from premature death? -
Answers✔single wage earning adult with dependents
______ is/are not designed to compensate the injured party for property damage or bodily injury
but to punish the individual or organization for their wrongful act - Answers✔Punitive Damages
In which age category do you face the highest risk of premature death? - Answers✔your 40s
The financial consequences of property risk include - Answers✔reduction in property value &
increases in expenses
Stimulant drugs, such as Adderall, are classified under which schedule for drug classification -
Answers✔Schedule 2
Which of the following is NOT of the five main categories of risk faced by individuals -
Answers✔Reputational
Poor financial planning by individuals may cause: - Answers✔a return to the workforce
following retirement
Causes of liability include: - Answers✔violations of statutory laws
violations of contract terms
negligent behavior
