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RMIN 4000 Test 1 Brown UGA Exam Questions and Answers $12.49   Add to cart

Exam (elaborations)

RMIN 4000 Test 1 Brown UGA Exam Questions and Answers

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  • RMIN 4000

RMIN 4000 Test 1 Brown UGA Exam Questions and Answers

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  • November 6, 2024
  • 8
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • RMIN 4000
  • RMIN 4000
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Nursephil2023
RMIN 4000 Test 1 Brown UGA
Exam Questions and Answers
Exposures - -things of value (assets) that could be lost

- 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

- Pure Risk - -A chance of loss or no loss, but no chance of gain. Insurance
can be bought for this

- Speculative Risk - -A chance of loss, no loss, or gain.

- 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

- 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

- 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)

- Direct Loss - -cost to replace a loss that is a direct result of a peril, such as
fire.

- Indirect Loss - -Loss that is a result or consequence of a direct loss

- Liability Risk - -a risk that relates to harm or injury to other people or their
property because of your actions; no upper limit; Defense costs; liens may be
placed on income or assets may be siezed

- Loss of business income - -Financial loss when the firm must shut down for
some time after a physical damage loss

- Grease fire in the kitchen causes a restaurant to close down for 4 weeks
while repairs are made. The restaurant has no income while closed. this is an
example of: - -Loss of business income

- 2 techniques for managing risk - -risk control, risk financing

- Risk Control - -techniques that reduce the frequency or severity of losses

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