Practice Quiz

Supply Chain Management

Category - Risk

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Risk can be stated as__________
  1. Risk= f (probability, consequences)
  2. Risk= f/I (probability divided by insurance cost)
  3. Risk= I+AC (insurance plus accidental costs)
  4. All of the above.
Explanation
Answer: A - Risk includes the possibility of losing some or all of the beginning investment. Different versions of risk are usually measured by calculating the standard deviation of the historical returns or average returns of a specific investment. A high standard deviation indicates a high degree of risk. The correct formula is Risk = f (Probability, Consequences).
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