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CTP · Question #807
(Topic 9) An electronics firm realizes that due to adverse events projected over the next 18 months there is a 5% chance that its profits will decrease by $100,000. The company's beta is .08 and its…
The correct answer is A. Compliance. Which of the following is one of the PRIMARY considerations when establishing treasury policies and procedures?
Manage Risk
Question
- (Topic 9)
An electronics firm realizes that due to adverse events projected over the next 18 months there is a 5% chance that its profits will decrease by $100,000. The company's beta is .08 and its cost of capital is 9%. What approach is the company MOST LIKELY using to determine its level of financial risk?
Options
- ACompliance
- BPersonnel management
- CConsequential damages
- DCost avoidance
How the community answered
(46 responses)- A72% (33)
- B13% (6)
- C11% (5)
- D4% (2)
Explanation
Which of the following is one of the PRIMARY considerations when establishing treasury policies and procedures?
Topics
#probability of loss#risk quantification#expected loss#financial risk
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