CH7: Risk and Return Quiz

Play an AI-generated podcast conversation about this lesson

Which type of investment would Apple computers be considered today?

low risk investment with high annual expected returns (correct)

low risk investment with low annual expected returns

high risk investment with low annual expected returns

high risk investment with high annual expected returns

What are the two axes of a risk matrix?

Whether the customer demand and market around a proposed idea are real; whether the product can actually be built as expected (correct)

The profitability of the idea and the timeliness of the new technology innovation

Management quality and customer demand

The degree of familiarity with the new market and degree of familiarity with the new product or technology

What type of economy does Dropbox exhibit?

Economies of scope with increasing risk

Economies of scope with opportunity cost

Economies of scale with static infrastructure

Economies of scale with increasing returns (correct)

What is a characteristic of a flow-through entity?

Taxation of corporate profits Signup and view all the answers

What type of business structure is characterized by perpetual continuity?

Regular C-Corporation Signup and view all the answers

What happens to creditors if a corporation fails and proper formalities have been followed?

They have a limited claim on the company's assets Signup and view all the answers

What is the definition of an outcome resulting from an action being certain?

When it will definitely happen Signup and view all the answers

Which type of uncertainty is not listed in the text?

Market Signup and view all the answers

What is a characteristic of a good entrepreneur in terms of risk-taking?

They take calculated risks Signup and view all the answers

Which of the following tasks is the most uncertain?

Begin independent research on self-driving cars Signup and view all the answers

What is a potential reason why a VR company struggled to stay afloat?

The hype around VR died and investors no longer saw the vertical as promising Signup and view all the answers

What is the definition of regret in the context of entrepreneurship?

The amount of gain that a person expects Signup and view all the answers

What is a unique strategy employed by Tencent that is not commonly seen among major Western tech companies?

Refusal to cooperate with the Chinese government Signup and view all the answers

What leads to an increased downside in a venture?

Increased hazard Signup and view all the answers

What type of case is an entrepreneur's assumption that their revenue growth will continue at the same rate?

Optimistic case Signup and view all the answers

What does 'pro forma' mean in the context of financial planning?

In advance of actual data Signup and view all the answers

What is true about the relationship between book value and market value?

Market value factors in the company's growth prospects Signup and view all the answers

What is typically not a category of an operating expense?

Investment returns Signup and view all the answers

CH7: Risk and Return Quiz

Choose a study mode

Podcast

Questions and Answers