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Self-test Questions
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1

“The limits to the precision and the extent of knowledge about a subject or an event”. This statement defines?
A)Risk
B)The future
C)Uncertainty
D)Strategic decision making
E)A scenario
2

Risk is about the degree and type of probability
A)True
B)False
3

Individuals will accept higher levels of risk when taking decisions on their own?
A)True
B)False
4

Groups do not represent `average` risk of their members. The tendency for higher risk taking in groups is termed:
A)risky business
B)group think
C)decision risk
D)risky shift
E)shifting risk
5

When managers make choices associated with uncertain outcomes, this is termed:
A)Managerial uncertainty
B)Organizational risk
C)Managerial risk
D)Organizational uncertainty
E)Game theory
6

Where organizations face volatile income streams which are associated with turbulent and unpredictable environments, this is termed:
A)Managerial uncertainty
B)Organizational risk
C)Managerial risk
D)Organizational uncertainty
E)Game theory
7

The theory that holds that decision makers make choices between risky alternatives influenced by both the magnitude and the probabilities of outcomes is called: Answer a) c) Incorrect- refer to 14.1.2, p 535, for more information d) Incorrect- refer to 14.1.2, p 535, for more information e) Incorrect- refer to 14.1.2, p 535, for more information
A)Utility theory
B)Prospect theory
C)Probability theory
D)Game theory
E)None of the above
8

A technique that decision makers have developed over time to cope with and reduce uncertainty and risk is:
A)Five forces analysis
B)Forecasting
C)P.E.S.T analysis
D)BCG matrix
E)Game theory
9

Net present value (NPV) and Internal Rate of Return (IRR) are both measures of risk analysis and assessment.
A)True
B)False
10

A technique that considers risk in multiple related decisions is:
A)Probability analysis
B)Break-even analysis
C)Decision trees
D)NPV
E)IRR
11

BERI and EIU are examples of:
A)portfolio planning models
B)accounting measures
C)decision trees
D)risk indices
E)none of the above
12

A more qualitative approach to trying to reduce risks and uncertainty is:
A)Economic forecasting
B)Benchmarking
C)P.E.S.T analysis
D)Scenario Planning
E)None of the above
13

Scenarios can be projections of up to (and beyond) ten years into the future?
A)True b)
B)False
14

Organizations which need to use scenarios are especially those which are able to react quickly?
A)True
B)False
15

The technique where core competences of the organization are assessed against future strategies that have been crafted following the scenario analysis is termed;
A)capability analysis
B)gap analysis
C)five forces analysis
D)benchmarking
E)none of the above





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