Lose, Win or Draw LAP Test

People who go into business know that the business may not succeed. This possibility is referred to as business

• risk.

• retention.

• downsizing.

• economizing

1. The general classifications of business risks are

• 1. competitive, strategic, financial, and operational.

• 1. hazard, operational, strategic, and financial.

• 1. production, hazard, operational, and strategic.

• 1. strategic, production, competitive, and hazard.

1. A hurricane that destroys a business is an example of a(n) __________ risk.

• 1. financial

• 1. strategic

• 1. hazard

• 1. operational

1. A garden store customer tripped over a plant, fell, and sued the store for damages. This is an example of a(n) __________ risk.

• 1. operational

• 1. operational

     financial

• 1. strategic

• 1. hazard

1. A union strike that stops production at a manufacturing plant is a(n) __________ risk.

• 1. hazard

• 1. strategic

• 1. financial

• 1. operational

1. What category of business risk includes production problems and incompetent employees?

• 1. Financial

• 1. Strategic

• 1. Operational

• 1. Hazard

1. When a rival’s product on the market reduces sales of your company’s product, your company is experiencing strategic risk caused by

• 1. regulatory and political issues.

• 1. competition.

• 1. changing customer needs.

• 1. obsolescence.

Financial loss from investing time and money to comply with accounting standards is an example of which strategic risk?

• Regulatory and political issues

• Reputation damage

• Changing customer needs

• Obsolescence

1. Which of the following is a pure business risk:

• 1. Inflation

• 1. Competition

• 1. Obsolescence

• 1. Robbery

1. Which of the following is an example of a business risk that cannot be covered by insurance:

• 1. Increase in interest rates

• 1. Goods lost in transit

• 1. Destruction of building by fire

• 1. Injury of employee on the job