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Cpcu 500 Ch.3 Questions And Answers With Verified Solutions Already Passed!!!
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Cpcu 500 Ch.3 Questions And Answers With Verified Solutions Already Passed!!!
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Cpcu 500 Ch.3 Questions And AnswersWith Verified Solutions Already
Passed!!!
To analyze current loss exposures based on historical data, the past loss data for
the loss exposures must be? - ANSWER✔✔ Relevant to current or future loss
exposures
How does having complete data help? - ANSWER✔✔ -Helps to isolate the cause
of each loss.
-Enables the risk professional to make reasonably reliable estimates of the dollar
amounts of the future losses
To be valid for making risk management decisions about future losses, loss data
must also be consistent in what two respects? - ANSWER✔✔ -The loss data must
be collected on a consistent basis for all recorded losses
-Data must be expressed in constant dollars, to adjust for differences in price
levels
When analyzing current property loss exposures based on historical data, the past
loss data must be relevant to the current or future loss exposures. What valuation
data would be relevant to this analysis? - ANSWER✔✔ Repair or replacement cost
at the time of restoration
In order to avoid underestimating or overestimating loss projections, historical
loss data must be expressed in? - ANSWER✔✔ Constant dollars
, What constitutes complete loss data depends largely on the nature of the loss
exposure being considered (T/F) - ANSWER✔✔ True
When developing loss severity distributions, risk professionals should organize
loss data by? - ANSWER✔✔ Size of loss
To accurately analyze loss exposures using data on past losses, the data should
meet what certain criteria? - ANSWER✔✔ The data should be relevant, complete,
consistent, and organized
The relative frequency with which the event can be expected to occur in the long
run in a stable environment - ANSWER✔✔ The probability of an event
What is the probability of an event that is totally impossible? - ANSWER✔✔ 0
What is the probability of an event that is absolutely certain? - ANSWER✔✔ 1
Probability analysis is particularly effective for projecting losses in organizations
that have? - ANSWER✔✔ -A substantial volume of data on past losses
-Fairly stable operations so that (except for price level changes) patterns of past
losses presumably will continue in the future
What is the three criteria needed in order to forecast with the law of large
number? - ANSWER✔✔ -The events have occurred in the past under substantially
identical conditions and have resulted from unchanging, basic casual forces
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