Investment Management - Investment Management MCQ
31. Business and investing are about allocating resources and capital to chosen:
- Option : A
- Explanation : Business and investing are about allocating resources and capital to the chosen risks.
32. Which of the following may be controlled by an investor?
- Option : A
- Explanation : Many decision makers focus on return, which is not something that is easily controlled, as opposed to risk, or exposure to risk, which may actually be managed or controlled.
- Option : A
- Explanation : Analyst A is correct because risk management covers understanding the level of bearable risk, measure the risk taken, adjust the bearable risk with the level of risk taken, while keeping in view the value maximization and utility of the company portfolio.
35. The “Doctrine of No Surprises” states that:
- A
risk managers are expected to predict risks.
- B
the effect of the outcome of a predictable or an unpredictable event would not surprise the risk manager and the effect would have been quantified and considered in advance.
- C
the effect of the outcome of a predictable or an unpredictable event would not surprise the risk manager, but it would be difficult to quantify it in advance.
- Option : B
- Explanation : The “Doctrine of No Surprises” states that the effect of the outcome of a predictable or an unpredictable event would not surprise the risk manager and the effect would have been quantified and considered in advance.
