__________ says that if you transfer risk to anotherparty, you must offer a retu

Question

__________ says that if you transfer risk to anotherparty, you must offer a return that fully compensates for theamount of risk transferred.  

A.

The Risk-Return Trade-Off Principle

B.

The Principle of Incremental Benefits

C.

The Principle of Self-Interested

D.

The Behavioral Principle

__________ says to recognize the value of optionscontained in derivatives.    

A.

The Capital Market Efficiency Principle

B.

The Principle of Comparative Advantage

C.

The Principle of Valuable Ideas

D.

The Options Principle

__________ says to look for opportunities to invest inpositive-NPV projects in foreign markets or to develop derivativesor design arrangements that enable firms to cope better with therisks they face in their foreign operations. A. The Principle of Diversification B. The Principle of Risk-Return Trade-off C. The Principle of Capital Market Efficiency D. The Principle of Valuable Ideas

Explanation / Answer

1)A 2)C 3)D 4)A

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