B6 - Financial Risk Management Flashcards

1
Q

What are the three types of risk attitudes?

A

Risk-indifferent, risk-averse, risk-seeking

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2
Q

What are the two broad categories of risk?

A
DUNS
Diversifiable 
Unsystematic (firm specific)
Nondiversifiable
Systematic (market)
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3
Q

How is effective interest rate calculated?

A

Interest paid per period / net proceeds of loan

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4
Q

What are the three risk exposure categories?

A

Transaction exposure, economic exposure, translation exposure

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