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Exam (elaborations)

INSR 310 EXAM ONE DR FERGUSON || A+ Guaranteed.

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  • Course
  • INSR 310 E
  • Institution
  • INSR 310 E

Risk correct answers any uncertainty regarding financial loss thus entity (personal) or enterprise (business) wide in scope Business Interruption correct answers Any event, whether anticipated (i.e., public service strike) or unanticipated (i.e., blackout) which disrupts the normal course of bus...

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  • October 27, 2024
  • 14
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • INSR 310 E
  • INSR 310 E
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FullyFocus
INSR 310 EXAM ONE DR FERGUSON || A+ Guaranteed.
Risk correct answers any uncertainty regarding financial loss thus entity (personal) or enterprise
(business) wide in scope

Business Interruption correct answers Any event, whether anticipated (i.e., public service strike)
or unanticipated (i.e., blackout) which disrupts the normal course of business operations at an
organization location

example: can't sell sandwiches because the building needs to be fixed

pure vs speculative

static vs dynamic

objective vs subjective

diversifiable vs non-diversifiable vs systematic correct answers what are common risk
classifications?

Pure Risk correct answers loss or no loss

ex: you either wrecked car or didn't

Speculative Risk correct answers loss, no loss, or gain

example: you lost $20,000 but INSCO pays you $25,000 or buying stock

can be affected by market taste

Static Risk correct answers unchanging over time or don't change meaningfully enough over
time

Dynamic Risk correct answers changes especially with technology

example: didn't have to worry about dying from car crash 200 years ago

Objective Risk correct answers statistical variation from expectation of risk

can put statistical probability/likelihood on you getting in car crash today

no human element

Subjective Risk correct answers individual perception/psychology of risk

people behave differently given risk

, example: being scared to fly

Diversifiable Risk correct answers uncorrelated (random) gains/losses affecting only one/few
individuals or groups

get rid of in portfolio

Non-Diversifiable Risk correct answers correlated (simultaneous) gains/losses affecting several
groups/segments

Systematic Risk correct answers Non-diversifiable risk that may impact an entire market or
financial system

No, it is a tool you can use to analyze risk correct answers Is risk the same as probability?

actual cost of losses
opportunity costs
mental anguish correct answers what are the primary burdens of risk?

individuals and society (losses in productivity)

current and future premiums (insurance rates go up after wreck)

loss control and compliance costs (added cost of installation/maintenance and compliance with
laws/rules/regulations) correct answers what/how do actual cost of losses affect concerning risk?

scarce resources (have to choose what is most important)

risk/return trade-offs (appear in everything we want to do) correct answers what/how do
opportunity costs affect concerning risk?

people worry about risk

general aggravation

behavior modification/motivation correct answers what/how does mental anguish affect
concerning risk?

Exposure correct answers thing of value subject to being lost

Maximum Probable/Possible Loss

These are NOT the same thing correct answers What does MPL stand for?

3.5 billion of coverage for each tower vs for one tower of Twin Towers

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