RMIN 4000 Test 1 Brown UGA Questions and Answers well Explained Latest 2024/2025 Update 100% Correct.
13 views 0 purchase
Course
RMIN 4000 Brown UGA
Institution
RMIN 4000 Brown UGA
Pure Risk - A chance of loss or no loss, but no chance of gain. Insurance can be bought for this
Exposures - things of value (assets) that could be lost
Property Risk - a risk that can lead to destruction or theft and loss of personal or business
property including money, vehicles, and buildings...
RMIN 4000 Test 1 Brown UGA
Pure Risk - A chance of loss or no loss, but no chance of gain. Insurance can be bought for this
Exposures - things of value (assets) that could be lost
Property Risk - a risk that can lead to destruction or theft and loss of personal or business
property including money, vehicles, and buildings; 2 types (direct and indirect)
Diversifiable risk - a risk that affects only individuals or small groups and not the entire economy.
It can be eliminated/ reduced through diversification. the risks are not correlated
Perils - things that cause injury or loss
risk - a calculated possibility of a negative outcome
Frequency - the number of losses (such as fire or theft) that occur within a specified time period.
aka the probability of a loss
Severity - the dollar amount of a loss for a specific peril (fire, theft, collision) aka How much does
it cost when the loss does occur?
Hazard - a condition that creates or increases the frequency or severity of loss but does NOT
cause the loss.
Physical Hazard - a physical condition that increases the frequency or severity of loss
Moral Hazard - the presence of insurance changes the behavior of the insured. ex: making hail
damage to get a check
, Morale hazard (attitudinal hazard) - A condition of carelessness or indifference that increases the
frequency or severity of loss.
Legal Hazard - characteristics of the legal system or regulatory environment that increase the
frequency or severity of losses
Georgia's Diminution in value is an example of a - legal hazard because it increases the severity on
property losses
Speculative Risk - A chance of loss, no loss, or gain.
Developing cancer or your house being caught on fire are two examples of what kind of risk? -
Pure Risk
diversifiable risk - A risk that affects only some individuals, businesses, or small groups. they can
be reduced/eliminated through diversification. the risks are not correlated
Non-Diversifiable Risk - affects the entire economy or large numbers of persons or groups within
the economy (hurricane, flood), risks are correlated (inflation, unemployment) cannot be eliminated
through diversification
Enterprise Risk - encompasses all major risks faced by a business firm, which include: pure risk,
speculative risk, strategic risk, operational risk, and financial risk
systemic risk - the risk that the failure of one financial institution can bring down other institutions
as well. instability in the financial system due to the interdependency between the players in the market
Types of Pure Risk - personal risks, property risks, liability risks, loss of business income, cyber-
security risks
Personal risk - a risk that can directly affect an individual or a family; loss of income, extra
expenses, and depletion of financial assets
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ACADEMICMATERIALS. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.69. You're not tied to anything after your purchase.
