When Assessing the Additional Risk That Can Occur from Investing

question 1

Multiple Choice

When assessing the additional risk that can occur from investing abroad, firms may choose to account for risk via:

• A) adjusting the cash flows.
• B) adjusting the discount rates.
• C) adjusting both cash flows and discount rates.
• D) adjusting all of the above.

Understand the importance and methods of creating performance measurements and the potential biases associated with them.

Familiarize with the challenges and advantages of different performance appraisal formats, including behaviorally anchored rating scales and management by objectives (MBO).

Understand the role of personal traits and results-based criteria in performance evaluations.

Recognize the potential rating errors and biases in performance appraisals and how to mitigate them.

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Definitions:

Hyperbola

A type of smooth curve lying in a plane, defined as the locus of points such that the difference between the distances from two fixed points (foci) is constant.

Asymptotes

Lines that a curve approaches as it heads towards infinity, indicating the boundary beyond which a graph does not venture.

Vertices

Plural of vertex; refers to the multiple points where two or more curves, lines, or edges meet, especially as the corner points of polygons or angles.

Hyperbola

A type of smooth curve lying in a plane, defined by its geometric properties or by equations for which it is the solution set.