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ARM 54 Final Exam: Questions And Answers (Solved) $15.99   Add to cart

Exam (elaborations)

ARM 54 Final Exam: Questions And Answers (Solved)

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ARM 54 Final Exam: Questions And Answers (Solved)

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  • October 4, 2024
  • 18
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • ARM 54
  • ARM 54
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LeCrae
ARM 54 Final Exam: Questions And Answers (Solved)

Hazard Risk Right Ans - Risk from accidental loss, including the possibility
of loss or no loss

Risk Profile Right Ans - Set of characteristics common to all risks in a
portfolio

Systematic Risk Right Ans - potential for major disruption in the function of
an entire market or financial system

Cost of Risk Right Ans - total cost incurred by and organization because of
the possibility of accidental loss

Value at risk Right Ans - threshold value such that the probability of loss on
the portfolio over the given time horizon exceeds this value, assuming normal
markets and no trading in portfolio

Exposure Right Ans - any condition that presents a possibility of gain or
loss whether or not an actual loss occurs

Volatility Right Ans - Frequent fluxuations, such as price of an asset

Law of Large Numbers Right Ans - math principle stating that as the
numbers of similar but independent exposure units increases the relative
accuracy of predictions about future outcomes (losses) also increases

Time Horizon Right Ans - estimated duration

Correlation Right Ans - relationship between variables

Pure Risk Right Ans - chance of loss or no loss, no chance of gain

speculative risk Right Ans - chance of loss, no loss, or gain

credit risk Right Ans - risk that customers or other creditors will fail to
make promised payments as they are due

,subjective risk Right Ans - perceived amount of risk based on an individual
organization's opinion

objective risk Right Ans - measurable variation in uncertain outcomes
based on facts and dates

diversifiable risk Right Ans - risk that affects only some individuals,
businesses, or small groups

nondiversifiable risk Right Ans - risk that affects a large segments of
society at the same time

market risk Right Ans - uncertainty about an investment's future value
because of potential changes in the market for that type of investment

Liquidity Risk Right Ans - risk that an asset cannot be sold on short notice
without incurring a loss

Enterprise risk management Right Ans - wide approach to managing all of
an organization's key business risk and opportunities with the intent of
maximizing shareholder value

Risk Management Standard Right Ans - document published by I
recognized authority that includes principles, criteria, and best practices for
risk management

Framework Right Ans - A structure, including elements such as concepts,
methods, procedures and metrics, that supports the risk management process

Risk Management Framework Right Ans - foundation for applying the risk
management process throughout the organization

Risk Criteria Right Ans - information used as a basis for measuring the
significance of a risk

Inherent Risk Right Ans - risk to an entity apart from any action to alter
either the likelihood or impact of risk

, Residual Risk Right Ans - Risk remaining after actions to alter the risks
likelihood or impact

Risk Based Capital (RBC) Right Ans - amount of capital an insurer need to
support its operations, given the insurers risk characteristics

Modeling Right Ans - system of calculating known outcomes based on
current data and then applying these calculations to new date to predict
future outcomes

frequency Right Ans - number of losses

severity Right Ans - size of loss

avoidance Right Ans - technique that uses backups, spares, or copies of
critical property information, or capabilities and keeps them in reserve

diversification Right Ans - spreads loss exposures over a number of
projects, products, markets, or regions

insurance Right Ans - transfers the financial consequences of certain
specified loss exposures from insured to insurer

loss exposure Right Ans - any condition or situation that presents a
possibility of loss, whether or not an actual loss occurs

hazard Right Ans - condition that increases frequency or severity of a loss

moral hazard Right Ans - condition that increased the likelihood that a
person will intentionally cause or exaggerate a loss

morale hazard (attitudinal hazard) Right Ans - condition of carelessness or
indifference that increases frequency or severity of loss

physical hazard Right Ans - tangible characteristic of property, persons, or
operations that tends to increase frequency or severity of loss

legal hazard Right Ans - condition of legal environment that increases
frequency or severity of loss

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