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RMI 3011 - Chapter 1 RMI 3011 Florida State University -Question and answers already passed $12.49   Add to cart
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RMI 3011 - Chapter 1 RMI 3011 Florida State University -Question and answers already passed

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RMI 3011 - Chapter 1 RMI 3011 Florida State University -Question and answers already passed Risk - correct answer Uncertainty concerning the occurrence of a loss Loss Exposure - correct answer Any situation or circumstance in which a loss is possible, regardless of whether a loss occurs ...

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  • November 30, 2024
  • 6
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • rmi 3011 chapter 1
  • rmi 3011 chapter 1 question and answers already
  • rmi 3011 chapter 1 rmi 3011 florida state univer

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RMI 3011 - Chapter 1 Question and
answers already passed
Risk - correct answer ✔Uncertainty concerning the occurrence of a loss


Loss Exposure - correct answer ✔Any situation or circumstance in which a
loss is possible, regardless of whether a loss occurs


Objective Risk - correct answer ✔Defined as the relative variation of actual
loss from expected loss


Subjective Risk - correct answer ✔Defined as uncertainty based on a
person's mental condition or state of mind


Chance of Loss - correct answer ✔The probability that an event will occur


Objective Probability - correct answer ✔Refers to the long-run relative
frequency of an event based on the assumptions of an infinite number of
observations and of no change in the underlying conditions


Subjective Probability - correct answer ✔The individual's personal estimate
of the chance of loss


Peril - correct answer ✔The cause of the loss


Hazard - correct answer ✔A condition that increases the chance of loss


Four Types of Hazard - correct answer ✔1. Physical Hazard

, 2. Moral Hazard
3. Attitudinal Hazard (Morale Hazard)
4. Legal Hazard


Physical Hazard - correct answer ✔A physical condition that increases the
frequency or severity of loss


Moral Hazard - correct answer ✔Dishonesty or character defects in an
individual that increase the frequency or severity of loss


Morale Hazard - correct answer ✔Carelessness or indifference to a loss,
which increases the frequency or severity of a loss


Legal Hazard - correct answer ✔Refers to characteristics of the legal system
or regulatory environment that increase the frequency or severity of loss


Pure vs Speculative Risk - correct answer ✔-A pure risk is a situation in
which there are only the possibilities of loss or no loss (earthquake)
-A speculative risk is a situation in which either profit or loss is possible
(gambling)


Diversifiable vs Nondiversifiable Risk - correct answer ✔-A diversifiable risk
affects only individuals or small groups (car theft). It is also called
nonsystematic or particular risk.
A nondiversifiable risk affects the entire economy or large numbers of persons
or groups within the economy (hurricane). It is also called systematic risk or
fundamental risk.


Enterprise Risk - correct answer ✔Encompasses all major risks faced by a
business firm, which include:

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