Chapter 23 - Chapter 23Managing Risk in the Small Business TRUE\/FALSE 1 According to the textbook risk is a condition in which there will be a known and

Chapter 23 - Chapter 23Managing Risk in the Small Business...

This preview shows page 1 - 3 out of 14 pages.

Chapter 23—Managing Risk in the Small Business TRUE/FALSE 1.According to the textbook, risk is a condition in which there will be a known and adverse deviation from a desired outcome that is expected or hoped for. PTS: 1 REF: p. 603 OBJ: 23-1 TYPE: D 2.Applied to a business, risk relates to the possibility of losses associated with the firm's reputation. PTS: 1 REF: p. 603 OBJ: 23-1 TYPE: D 3.Business risks can be classified into two broad categories—asset risk and pure risk. PTS: 1 REF: p. 603 OBJ: 23-1 TYPE: D 4.Pure risk refers to a situation where only loss or no loss can occur—there is no potential gain. PTS: 1 REF: p. 603 OBJ: 23-1 TYPE: D 5.Risk management and insurance management are synonymous. PTS: 1 REF: p. 609 OBJ: 23-3 TYPE: D 6.A property loss that arises from an inability to carry on normal business operations as a result of a dir-ect loss is called an indirectloss. PTS: 1 REF: p. 605 OBJ: 23-2 TYPE: C 7.Risk management in a small firm is essentially the same as risk management in a large firm. PTS: 1 REF: p. 611 OBJ: 23-3 TYPE: C 8.Fortunately for the entrepreneur, many property-oriented risks are insurable. PTS: 1 REF: p. 603 OBJ: 23-2 TYPE: C
Image of page 1
9.Flood damage to movable property is insurable. PTS: 1 REF: p. 616 OBJ: 23-5 TYPE: C 10.Nothing can be done to prevent losses from natural disasters. PTS: 1 REF: p. 611 OBJ: 23-2 TYPE: C 11.Because of close management, small business owners are less vulnerable to business swindles than are their large firm counterparts. PTS: 1 REF: p. 617 OBJ: 23-5 TYPE: C 12.Real property excludes anything physically attached to land, such as buildings. PTS: 1 REF: p. 603 OBJ: 23-2 TYPE: D
Image of page 2
Image of page 3

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture