Question

33 multiple choice 2 points
what is an opportunity cost?
a) the total amount of money spent
b) the benefit of the next best alternative when a decision is made
c) the amount of money saved
d) the amount of money earned
a
b
c
d
34 multiple choice 2 points
what is the purpose of managing financial risk?
a) to increase debt
b) to avoid all risks
c) to protect against potential financial losses
d) to encourage reckless behavior
a
b
c
d

Explanation:

• Question 33:
• Option A: Total money spent is just cost, not opportunity cost.
• Option B: Opportunity cost is defined as the benefit of the next - best alternative when a decision is made.
• Option C: Money saved is not related to the concept of opportunity cost.
• Option D: Money earned is also not the definition of opportunity cost.
• Question 34:
• Option A: Increasing debt is not the purpose of managing financial risk.
• Option B: It is impossible to avoid all risks.
• Option C: Protecting against potential financial losses is a key purpose of managing financial risk.
• Option D: Encouraging reckless behavior is the opposite of what financial risk management aims for.

Answer:

• 33. B. The benefit of the next best alternative when a decision is made
• 34. C. To protect against potential financial losses