exam for deca

Businesses are most likely to prepare contingency and fallback plans for risks that they choose to

accept

Regular credit accounts are sometimes called open accounts because they allow

credit users to make purchases at any time during a set period

A business is most likely to mitigate a risk that is __________ to eliminate completely

difficult and expensive

If aggregate demand is rising, businesses and industries will tend to

increase production

Personal decisions can be difficult to make because they

made by you personally

Technological innovations can increase strategic risk for business by

making some products obsolete

What category of business risk includes production problems and incompetent employees?

operational

Carefully selecting goods or services to sell is an example of handling business risks by __________ the risk.

preventing or controlling

Careful screening of credit customers is an example of handling business risks through a. training.

prevention

Ian is planning a picnic even though it's cloudy because he doesn't think it is likely to rain. Ian has likely considered the __________ of rain.

probabililty

The two dimensions of risk are

probability and impact

When a business keeps a risk because management is unaware of it, the business is __________ the risk.

retaining

What type of credit account gives the customer a credit limit at the time the account is opened and allows the customer to make payments over a period of time or to pay off the total amount due each month?

revolving

Evaluating the magnitude of a risk can be done by considering its

risk

People who go into business know that the business may not succeed. This possibility is referred to as business

risk

Which of the following is a pure business risk:

robbery

What source of credit buys borrowers' contracts from sellers?

sales finance companies

What type of loan requires collateral?

secured

What category of risk typically has the most impact on a business's ability to reach its goals and objectives?

strategic

Which of the following is a true statement about annual fees

the amounts vary from card to card

Businesses typically accept a risk's consequences if

the potential payoff is higher than the losses

Which of the following is a reason that businesses extend credit to customers:

to be competitive

Contractual agreements such as guarantees, surety bonds, and leases are examples of business risks being handled through

transfer

Requiring a contractor to purchase a surety bond is an example of handling business risk by __________ the risk.

transferring

Tyson plans to use credit primarily at restaurants. What type of credit would be the best choice for him?

A travel and entertainment card

Finance charges are expressed as a(n)

Annual Percentage Rate

An example of an internal financial risk is

Improper budgeting practices

Financial loss from investing time and money to comply with accounting standards is an example of which strategic risk?

Regulatory and political issues

Which of the following is an example of a social media activity that could result in reputational risk:

Tara posts several negative comments about a girl she doesn't like on Facebook

Which of the following is true of unsecured loans:

They are usually made to people who have excellent credit ratings.

Which of the following statements accurately explains the nature of prospective risks

They have not happened before but could occur in the future

If a business chooses not to do something that it considers risky, it is __________ the risk

avoiding

Management decides to hold its annual meeting in one U.S. city rather than another because of crime in that city. This is an example of __________ the risk.

avoiding

A good source of information about a business's retroactive risks would be a(n)

business incident log

What do risk managers need to do to help their company successfully launch a new product?

evaluate the potential gains and losses of the launch

What credit legislation gives businesses that extend credit to customers specific deadlines to follow in responding to customers' complaints about errors in their credit statements?

fair credit billing act

You inspect your credit history and find a mistake. Which credit legislation gives you the right to have the mistake corrected

fair credit reporting act

Mario decided to attend an out-of-state college 500 miles from home. Mario's father is upset when the holidays arrive because Mario is unable to spend them at home. When Mario made his decision, he forgot to consider the risk to his

family

If you purchase a car, which type of credit are you most likely to use?

installment

Jackie purchased a television on credit. She made a down payment and signed an agreement to pay a specific monthly amount, including interest, over the next 12 months. This is an example of __________ credit.

installment

Which of the following is an internal factor that can affect your ability to make decisions:

negative emotions

A union strike that stops production at a manufacturing plant is a(n) __________ risk

operational

Poor product development, unreliable manufacturing equipment, and product shortages are examples of __________ risks.

operational

An earthquake is an example of a __________ risk

pure

Jorge is having trouble deciding whether to play football because he knows his father will probably disapprove of his choice. Which of the following risks is Jorge worried about:

relational

If a risk is small in terms of money, a business may decide to __________ the risk

retain

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (CARD) ensures that credit contract terms

written in plain language

Why is it a bad idea to try to assess the risks of your decisions when you are tired?

you might not think clearly