B6 - Financial Risk Management Flashcards
1
Q
What are the three types of risk attitudes?
A
Risk-indifferent, risk-averse, risk-seeking
2
Q
What are the two broad categories of risk?
A
DUNS Diversifiable Unsystematic (firm specific) Nondiversifiable Systematic (market)
3
Q
How is effective interest rate calculated?
A
Interest paid per period / net proceeds of loan
4
Q
What are the three risk exposure categories?
A
Transaction exposure, economic exposure, translation exposure