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AGEC 325 Quizzes for Exam 3 Questions with Answers
(100% Correct Answers)
T or F: Risk acceptance is an individual decision Answer: True
T or F: All else being equal, having healthy financial reserves makes it
easier to take on risk Answer: True
T or F: All else being equal, willingness to take on financial risks
increases with a person's age Answer: False
T or F: Managers rarely make decisions based on averages or expected
values. Answer: False
T or F: Decision makers tend to prefer options with higher variability
in returns Answer: False
T or F: Often, managers have to rely on their experience and personal
judgement to help make a decision Answer: True
T or F: The range of the following numbers is 173, 6, 9, 12, 18 Answer:
False
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,2
T or F: Approximately 95% of the population represented by a
standard normal distribution lies within 2 standard deviations of the
mean Answer: True
T or F: The expected value (or "average") of the following set of
numbers is 7.5.5, 10 Answer: True
T or F: Of the two choices represented below, most people would
choose Option A.Option A: Expected Returns = $1,500. Coefficient of
Variation = 0.2.Option B: Expected Returns = $1,500. Coefficient of
Variation = 0.1 Answer: False
T or F: A Decision Tree and Payoff Matrix convey the same
information related to choices underuncertainty. Answer: True
T ro F: When using a "Most Likely Outcome" decision rule, we select
the strategy with the highestexpected return in the most likely scenario
Answer: True
T or F: When using a "Maximum Expected Value" decision rule, we
select the strategy with the highest expected return and lowest
variability of returns Answer: False
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, 3
T or F: When using a "Safety First" decision rule, we select the scenario
that has the best of the worst outcomes for all scenarios Answer: True
T or F: One approach for managing production risks is to choose
enterprises with stable incomes Answer: true
T or F: Using future and options markets is not a good tool for
managing price risks Answer: False
T or F: Financial risks can be caused by changes in the value of assets
put up as collateral Answer: True
T or F: A line of credit is not a good tool for managing Financial risks.
Answer: False
T or F: Developing a legal will is one way to address legal risks to the
business. Answer: True
T or F: Some personal risks in the operation can be addressed by
adopting and enforcing employee safety precautions. Answer: True
T or F: Enterprise Analysis allows us to measure the contribution of
each enterprise toward the financial goals of the business. Answer:
True
© 2025 All rights reserved
AGEC 325 Quizzes for Exam 3 Questions with Answers
(100% Correct Answers)
T or F: Risk acceptance is an individual decision Answer: True
T or F: All else being equal, having healthy financial reserves makes it
easier to take on risk Answer: True
T or F: All else being equal, willingness to take on financial risks
increases with a person's age Answer: False
T or F: Managers rarely make decisions based on averages or expected
values. Answer: False
T or F: Decision makers tend to prefer options with higher variability
in returns Answer: False
T or F: Often, managers have to rely on their experience and personal
judgement to help make a decision Answer: True
T or F: The range of the following numbers is 173, 6, 9, 12, 18 Answer:
False
© 2025 All rights reserved
,2
T or F: Approximately 95% of the population represented by a
standard normal distribution lies within 2 standard deviations of the
mean Answer: True
T or F: The expected value (or "average") of the following set of
numbers is 7.5.5, 10 Answer: True
T or F: Of the two choices represented below, most people would
choose Option A.Option A: Expected Returns = $1,500. Coefficient of
Variation = 0.2.Option B: Expected Returns = $1,500. Coefficient of
Variation = 0.1 Answer: False
T or F: A Decision Tree and Payoff Matrix convey the same
information related to choices underuncertainty. Answer: True
T ro F: When using a "Most Likely Outcome" decision rule, we select
the strategy with the highestexpected return in the most likely scenario
Answer: True
T or F: When using a "Maximum Expected Value" decision rule, we
select the strategy with the highest expected return and lowest
variability of returns Answer: False
© 2025 All rights reserved
, 3
T or F: When using a "Safety First" decision rule, we select the scenario
that has the best of the worst outcomes for all scenarios Answer: True
T or F: One approach for managing production risks is to choose
enterprises with stable incomes Answer: true
T or F: Using future and options markets is not a good tool for
managing price risks Answer: False
T or F: Financial risks can be caused by changes in the value of assets
put up as collateral Answer: True
T or F: A line of credit is not a good tool for managing Financial risks.
Answer: False
T or F: Developing a legal will is one way to address legal risks to the
business. Answer: True
T or F: Some personal risks in the operation can be addressed by
adopting and enforcing employee safety precautions. Answer: True
T or F: Enterprise Analysis allows us to measure the contribution of
each enterprise toward the financial goals of the business. Answer:
True
© 2025 All rights reserved
