RMI Exam 1 Review Spring 2016 At which level are incentives found a Individual b Organizational c Societal d All of the above Answer d All of the above Eric must keep a B average or else lose his starting position on the basketball team What type of incentive best describes this situation a Moral b Coercive c Natural d Financial Answer b Coercive Sue is a very bright college student who stays up to date on all the news channels In response to the number of child abductions she has seen on the news lately she insists that her mother purchase a child harness for her younger brother What type of bias is this a Experience b Age c Cultural d Media Answer d Media Which of the following actions describes a way organizations use expected value A Organizations account for external factors using net realizable value B Organizations estimate the future cash flows that are generated by an investment and then discount them back to present value C Organizations and individuals capitalize assets in order to predict future economic benefit D Organizations eliminate bias by accounting for difficult transaction mechanisms in macroeconomic systems Answer B Organizations estimate the future cash flows that are generated by an investment and then discount them back to present value Political incentives often do what to the discount rate a Not enough information is known to determine the effect on discount rate b Political incentives often decrease the discount rate c Political incentives often increase the discount rate d Political incentives have no effect on the discount rate Answer c Political incentives often increase the discount rate What field basically studies incentive systems a Risk management b Psychology c Economics d None of the above Answer c Economics What motivates an individual to make perform an action a Risk b Reward c Bias d Incentive Answer d Incentive A n is an inclination of temperaments or outlook to present or hold a partial persepctive at the expense of possibly equally valid alternatives in reference to objects people or groups A decision B necessary risk C known known D bias Answer D bias A bias can be described by which of the following a Subjective view b Tangible view c Objective view d Continuous view Answer a Subjective view Which part of Secretary of State Donald Rumsfeld s quote poses the most threat to analyzing and creating decision making models A situational bias B known unknowns C unknown unknowns D known knowns Answer C unknown unknowns According to Alan Schwarz in Is the Use of Smart Pills for Cognitive Enhancement Dangerous false prescriptions of ADHD medicine is on the rise Which of the following is not listed as being one of the dangers of false prescription A strong addiction B suicide suicidal thoughts C increased mental awareness D loss of weight Answer C increased mental awareness According to Joshua Gowin s article some university surveys have shown that up to 35 of students have obtained which two drugs as a study aid A Adderall and Ritalin B Ritalin and Modafinil C Modafinil and Adderall D None of the above Answer A Adderall and Ritalin In which age category do you face the highest risk of premature death A your 50 s B your 40 s C The risk of premature death does not change with age D your 30 s Answer B your 40 s According to Joshua Gowin s article on smart pills which of the following is not a characteristic of students who used Ritalin and Adderall as study drugs A These students tended to have lower GPAs in the 2 0 3 0 range B These students did steady work throughout the semester C These students smoked more pot than average students D These students skipped more classes than average students Answer B These students did steady work throughout the semester Which of the following is NOT one of the five main categories of risk faced by individuals A Health B Property C Liability D Reputational Answer D Reputational Alan Schwarz s attack on smart pills centers around the story of a college class president and aspiring medical student who became addicted to the smart pill he was improperly prescribed A Richard Fee B Charles Parker C Waldo M Ellison D Robert M Woodard Answer A Richard Fee Joshua Gowin posits that since most people believe Adderall and Ritalin will work they will at minimum offer A a heightened sense of cognition B a placebo effect C a mild amount of jitteriness D a series of side effects Answer B a placebo effect Which of the following are elements of a loss exposure I asset exposed to loss II cause of loss III financial consequences of loss A I only B II only C III only D All of the above are elements of a loss exposure Answer D All of the above are elements of a loss exposure According to Alan Schwarz which involved party should first change how ADHD medicine is given A individuals prescribed to Ritalin B colleges universities and other post secondary institutions C doctors D CHADD members and parents Answer C doctors The financial consequences of property risks include I reduction in property value II increases in expenses III lost salary A I only B II only C III only D I and II only E All of the above Answer D I and II only According to From Superstorms to Factory Fires the author was surprised to find what kind of correlation between how much a firm spends annually on procurement at a particular site and the site s impact on company performance A significant inverse correlation B moderate positive correlation C supplier correlation D little correlation Answer D Little correlation In From Superstorms to Factory Fires what was Ford able to do using the model described in the article A Using the model Ford did not learn about the risk exposure index score or inventory information vendor analysis management attention B Ford was able to avoid OEM producers with short time to recovery using the model s C Using the model Ford was able to identify the supplier sites that required no special risk D Using the model Ford could find a supplier site with a long TTR and high financial impact Answer Using the model Ford was able to identify the supplier sites that required no special risk management attention In Strategy Risk and the Global Financial Crisis Walter Keichel argues that a fair minded observer would conclude which of the following statements in regards to the financial crisis A Strengthening international markets caused a shaky financial system in the developed world leading to prospecting in developing countries such as BRICS B
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