Question

What is the primary objective of Financial Risk Management?

a.

To increase exposure to financial risks

b.

To speculate on future financial risks

c.

To reduce the firm's exposure to future financial risks

d.

To create instability in the balance sheet position

Posted under IC 89 Management Accounting

Answer: (c).To reduce the firm's exposure to future financial risks Explanation:Financial Risk Management aims to identify, analyze, evaluate, and manage current and possible future financial risks with the objective of reducing the firm's exposure to these risks and stabilizing its balance sheet position.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. What is the primary objective of Financial Risk Management?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. Which of the following is NOT a type of financial derivative?

View solution

Q. What is the definition of a derivative?

View solution

Q. What is the primary purpose of using derivatives in financial risk management?

View solution

Q. Which of the following is NOT considered a derivative transaction?

View solution

Q. What is the purpose of using derivatives in hedging risks?

View solution

Q. What is a Forward Rate Agreement (FRA) used for?

View solution

Q. What is another term for Financial Derivatives?

View solution

Q. How are exchange-traded derivatives characterized?

View solution

Q. What is the classification of derivatives based on the underlying assets?

View solution

Q. What is a basic feature of derivatives?

View solution

Q. What is the usual characteristic of the notional face value in derivatives?

View solution

Q. What is an Embedded Derivative?

View solution

Q. What is the purpose of a Commodity Derivative?

View solution

Q. What characterizes Over the Counter (OTC) Derivatives?

View solution

Q. What are Exchange-Traded Derivatives?

View solution

Q. How are prices typically handled in Exchange-Traded Derivatives?

View solution

Q. How do speculators use derivatives?

View solution

Q. What happened in 1995 that brought notoriety to speculative trading in derivatives?

View solution

Q. How do investors use derivatives for risk management?

View solution

Q. What is one purpose of providing leverage in derivatives trading?

View solution
View All MCQs on IC 89 Management Accounting

Recommended Subjects

Are you eager to expand your knowledge beyond IC 89 Management Accounting? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

Total Quality Management

Enhance your understanding of quality management with our Total Quality Management...

Cognitive Radio

Step into the dynamic world of Cognitive Radio, where wireless communication meets...

Financial Management and Financial Markets

Master the world of finance with our Financial Management and Financial Markets...

Cost Accounting

Dive into the realm of Cost Accounting with our specialized category. Explore cost...

Concrete Technology

Welcome to Concrete Technology, a category that unravels the secrets behind the...

IC38 Life Insurance Agent Exam

Prepare for success in the Insurance Institute of India (III) IC38 IRDA examination...

Cell Biology

Delve into the fascinating world of Cell Biology with our specialized category....

Bioinformatics

Unlock the power of data analysis in biology with our Bioinformatics category....

IC90 Human Resource Management

Prepare for success in the Insurance Institute of India (III) examination with IC90...