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HFT 4464: Exam 2 Questions With Correct
Answers 100% Verified.
Which of the following statements is untrue? - Answer✔The stock market is the only
marketplace where value is created
Which of the following statement is not true? - Answer✔Hospitality businesses, large and small
alike, are challenged by financial instruments and markets tremendously to survive
Futures are popular in the hospitality industry because many firms are interested in "locking-in"
purchase prices to reduce the likelihood of a loss due to an unfavorable price change in the
underlying commodity or assets - Answer✔true
High risk and return expectations are consistent with an aggressive approach - Answer✔true
Which of the following statement is true - Answer✔In essence, a bond is a fixed income
instrument delineating a load made by a creditor to a debtor. It typically contains specified
terms that dictate the loan term and interest rates
Which of the following has an agency problem? - Answer✔Managers act to maximize their
earnings
If a restaurant chain secured a loan with variable interest rates and is concerned about the
rising interest rates, the chain would prefer to have the choice of making fixed interest
payments. Which of the following is most likely the choice for the chain? - Answer✔A swap
contract
When you prefer the expected value of the prospect to the prospect itself, you are considered -
Answer✔risk averse
When you would prefer the prospect with a 60% chance of generating $240,000 and a 40%
chance of generating $500,000 to generating $344,000 with certainty. You are considered -
Answer✔risk seeking
Which of the following statements is true? - Answer✔If you would consider the utility of getting
the expected value of a prospect to be greater than the expected utility of the prospect, your
risk attitude is considered as risk averse; On the other hand, your risk attitude would be risk
seeking if you prefer the prospect to the expected value of the prospect; If you care about the
expected value but don't about risk, then you are considered as risk neutral
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HFT 4464: Exam 2 Questions With Correct
Answers 100% Verified.
Which of the following statements is untrue? - Answer✔The stock market is the only
marketplace where value is created
Which of the following statement is not true? - Answer✔Hospitality businesses, large and small
alike, are challenged by financial instruments and markets tremendously to survive
Futures are popular in the hospitality industry because many firms are interested in "locking-in"
purchase prices to reduce the likelihood of a loss due to an unfavorable price change in the
underlying commodity or assets - Answer✔true
High risk and return expectations are consistent with an aggressive approach - Answer✔true
Which of the following statement is true - Answer✔In essence, a bond is a fixed income
instrument delineating a load made by a creditor to a debtor. It typically contains specified
terms that dictate the loan term and interest rates
Which of the following has an agency problem? - Answer✔Managers act to maximize their
earnings
If a restaurant chain secured a loan with variable interest rates and is concerned about the
rising interest rates, the chain would prefer to have the choice of making fixed interest
payments. Which of the following is most likely the choice for the chain? - Answer✔A swap
contract
When you prefer the expected value of the prospect to the prospect itself, you are considered -
Answer✔risk averse
When you would prefer the prospect with a 60% chance of generating $240,000 and a 40%
chance of generating $500,000 to generating $344,000 with certainty. You are considered -
Answer✔risk seeking
Which of the following statements is true? - Answer✔If you would consider the utility of getting
the expected value of a prospect to be greater than the expected utility of the prospect, your
risk attitude is considered as risk averse; On the other hand, your risk attitude would be risk
seeking if you prefer the prospect to the expected value of the prospect; If you care about the
expected value but don't about risk, then you are considered as risk neutral
1|Page
