1. In any investment risk is involved. In the following example of an investment, the loss is likely to be $20,000,000. Success will bring in $50,000,000. The probability assessment of loss is 35% while that of success is 80%. The expected return on the investment is, therefore:
   1. $47,000,000
   2. $33,000,000
   3. $70,000,000
   4. $50,000,000

1. The orientation of financial management is towards the:
   1. past;
   2. future;
   3. present;
   4. all of the above.
2. Forecasting is important for organizations and facilitates organizations to develop plans for:
   1. personnel;
   2. facilities;
   3. financial;
   4. All of the above.

1. The financial plan is important because it:
   1. Translates all support plans into monetary terms;
   2. Identifies the internal sources of funds;
   3. Presents an approach for raising of capital from external sources, if required;
   4. All of the above.

1. Multi-year cash forecasts are important to any organization as it helps identify:
   1. shortages of funds;
   2. excesses of funds
   3. problems and opportunities;
   4. All of the above.

1. In monopolistic situations, returns to investors are _____ while in business with risk exposure the return to investors are _______.
   1. high; low;
   2. low; high;
   3. same
   4. all of the above.

1. The financial plan must:
   1. define precisely levels of risk that will be assumed;
   2. assess expected returns in light of the risks;
   3. provide a plan of action for managing risk and realizing the expected returns;
   4. All of the above.

1. The statistical measurement of the dispersion around the mean of a distribution is called the:
   1. dispersion factor;
   2. standard deviation;
   3. mean;
   4. normal distribution.

1. The economic concept of decreasing marginal utility of wealth assumes that:
   1. subsequent increments of wealth carry with them the same benefits that the original endowment brought;
   2. subsequent increments of wealth do not carry with them the same benefits that the original endowment brought;
   3. both increments and decrements are equally valued;
   4. All of the above.