Exam (elaborations)
RMIN 4000 Test 1 Brown UGA Questions and Answers 100% Verified.
- Course
- Institution
RMIN 4000 Test 1 Brown UGA Questions and Answers 100- Verified.
[Show more]
Content preview
RMIN 4000 Test 1 Brown UGA Questions and Answers 100%Verified
Exposures - (correct answer) -things of value (assets) that could be lost
io io io io io io io io io io io
Perils - (correct answer) -things that cause injury or loss
io io io io io io io io io
risk - (correct answer) -a calculated possibility of a negative outcome
io io io io io io io io io io
Frequency - (correct answer) -the number of losses (such as fire or theft) that occur within a specified
io io io io io io io io io io io io io io io io io
time period. aka the probability of a loss
io io io io io io io io
Severity - (correct answer) -the dollar amount of a loss for a specific peril (fire, theft, collision) aka How
io io io io io io io io io io io io io io io io io io
much does it cost when the loss does occur?
io io io io io io io io io
Hazard - (correct answer) -a condition that creates or increases the frequency or severity of loss but
io io io io io io io io io io io io io io io io
does NOT cause the loss.
io io io io io
Physical Hazard - (correct answer) -a physical condition that increases the frequency or severity of loss
io io io io io io io io io io io io io io io
Moral Hazard - (correct answer) -the presence of insurance changes the behavior of the insured. ex:
io io io io io io io io io io io io io io io
making hail damage to get a check
io io io io io io io
Morale hazard (attitudinal hazard) - (correct answer) -A condition of carelessness or indifference that
io io io io io io io io io io io io io
increases the frequency or severity of loss.
io io io io io io io
Legal Hazard - (correct answer) -characteristics of the legal system or regulatory environment that
io io io io io io io io io io io io io
increase the frequency or severity of losses
io io io io io io io
Georgia's Diminution in value is an example of a - (correct answer) -legal hazard because it increases
io io io io io io io io io io io io io io io io
the severity on property losses
io io io io io
Pure Risk - (correct answer) -A chance of loss or no loss, but no chance of gain. Insurance can be
io io io io io io io io io io io io io io io io io io io
bought for this
io io io
Speculative Risk - (correct answer) -A chance of loss, no loss, or gain.
io io io io io io io io io io io io
Diversifiable risk - (correct answer) -a risk that affects only individuals or small groups and not the
io io io io io io io io io io io io io io io io
entire economy. It can be eliminated/ reduced through diversification. the risks are not correlated
io io io io io io io io io io io io io io
, Developing cancer or your house being caught on fire are two examples of what kind of risk? - (correct
io io io io io io io io io io io io io io io io io io
answer) -Pure Risk
io io io
diversifiable risk - (correct answer) -A risk that affects only some individuals, businesses, or small
io io io io io io io io io io io io io io
groups. they can be reduced/eliminated through diversification. the risks are not correlated
io io io io io io io io io io io io
Non-Diversifiable Risk - (correct answer) -affects the entire economy or large numbers of persons or io io io io io io io io io io io io io io
groups within the economy (hurricane, flood), risks are correlated (inflation, unemployment) cannot
io io io io io io io io io io io io
be eliminated through diversification
io io io io
Enterprise Risk - (correct answer) -encompasses all major risks faced by a business firm, which include:
io io io io io io io io io io io io io io io
pure risk, speculative risk, strategic risk, operational risk, and financial risk
io io io io io io io io io io io
systemic risk - (correct answer) -the risk that the failure of one financial institution can bring down
io io io io io io io io io io io io io io io io
other institutions as well. instability in the financial system due to the interdependency between the
io io io io io io io io io io io io io io io
players in the market
io io io io
Types of Pure Risk - (correct answer) -personal risks, property risks, liability risks, loss of business
io io io io io io io io io io io io io io io
income, cyber-security risks
io io io
Personal risk - (correct answer) -a risk that can directly affect an individual or a family; loss of income,
io io io io io io io io io io io io io io io io io io
extra expenses, and depletion of financial assets
io io io io io io io
Property Risk - (correct answer) -a risk that can lead to destruction or theft and loss of personal or
io io io io io io io io io io io io io io io io io io
business property including money, vehicles, and buildings; 2 types (direct and indirect)
io io io io io io io io io io io io
Direct Loss - (correct answer) -cost to replace a loss that is a direct result of a peril, such as fire.
io io io io io io io io io io io io io io io io io io io io
Indirect Loss - (correct answer) -Loss that is a result or consequence of a direct loss
io io io io io io io io io io io io io io io
Liability Risk - (correct answer) -a risk that relates to harm or injury to other people or their property
io io io io io io io io io io io io io io io io io io
because of your actions; no upper limit; Defense costs; liens may be placed on income or assets may
io io io io io io io io io io io io io io io io io io
be siezed
io io
Loss of business income - (correct answer) -Financial loss when the firm must shut down for some time
io io io io io io io io io io io io io io io io io
after a physical damage loss
io io io io io
Grease fire in the kitchen causes a restaurant to close down for 4 weeks while repairs are made. The
io io io io io io io io io io io io io io io io io io
restaurant has no income while closed. this is an example of: - (correct answer) -Loss of business
io io io io io io io io io io io io io io io io io
income
io
2 techniques for managing risk - (correct answer) -risk control, risk financing
io io io io io io io io io io io
Risk Control - (correct answer) -techniques that reduce the frequency or severity of losses
io io io io io io io io io io io io io
Risk Financing - (correct answer) -techniques that provide for the funding of losses
io io io io io io io io io io io io
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 Wisdoms. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
85169 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now