Study Questions
20–1. In Regardless of Your Major: Welcome to a Risky World on page 634, the need to engage in risk management was linked to the day-to-day activities of firm employees from multiple functional areas, including operations, marketing, and accounting. What are the two sources of risk identified in this discussion?
20–2. Define the term risk management.
20–3. A firm’s cash flows are risky for a number of reasons. Identify and discuss five sources of risk or volatility in firm cash flows.
20–4. What was the risk management policy followed by the Chesapeake Energy Corporation (CHK) with respect to the price of the oil and gas it needed for its future production prior to 2011?
20–5. Firms regularly use insurance as a means of ...
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