Chapter Ten Principles of Risk Management This chapter contains 30 multiple choice questions,10 short problems,and 5 longer problems. Multiple Choice 1. that"matters"because if affects people's welfare. exists whenever one does not know for sure what will occur in the future. (a)Uncertainty is risk;Uncertainty (b)Risk is uncertainty;Uncertainty (c)Risk is uncertainty;Risk (d)Uncertainty is risk;Risk Answer:(b) 2. is a measure of willingness to pay to reduce one's exposure to risk. (a)Risk aversion (b)Risk avariciousness (c)Risk predilection (d)Risk inflation Answer:(a) 3.When choosing among investment alternatives with the same expected rate of return,a risk averse individual chooses the one with the risk. (a)surest (b)most uncertain (c)lowest (d)highest Answer:(c) 10-110-1 Chapter Ten Principles of Risk Management This chapter contains 30 multiple choice questions, 10 short problems, and 5 longer problems. Multiple Choice 1. ________ that “matters” because if affects people's welfare. ________ exists whenever one does not know for sure what will occur in the future. (a) Uncertainty is risk; Uncertainty (b) Risk is uncertainty; Uncertainty (c) Risk is uncertainty; Risk (d) Uncertainty is risk; Risk Answer: (b) 2. ________ is a measure of willingness to pay to reduce one's exposure to risk. (a) Risk aversion (b) Risk avariciousness (c) Risk predilection (d) Risk inflation Answer: (a) 3. When choosing among investment alternatives with the same expected rate of return, a risk averse individual chooses the one with the ________ risk. (a) surest (b) most uncertain (c) lowest (d) highest Answer: (c)