AIDA 182 - Risk and Insurance Analysis Techniques Exam Prep| Questions and Verified Answers| 100% Correct (Latest 2023/ 2024 Update)

AIDA 182 Risk and Insurance Analysis Techniques Exam Prep| Questions and Verified Answers| 100% Correct (Latest 2023/ 2024 Update) Q: exposure Answer: Any condition that presents a possibility of gain or loss, whether or not an actual loss occurs; provides a measure of the maximum potential damage associated with an occurrence Q: volatility Answer: Frequent fluctuations, such as in the price of an asset; provides a basic measure that can be applied to risk outcomes Q: likelihood Answer: A qualitative estimate of the certainty with which the outcome of a specific event can be predicted. Q: consequences Answer: the effects, positive or negative, of an occurrence Q: time horizon Answer: estimated duration Q: correlation Answer: a relationship between variables Q: covariance Answer: The relative association between variables to move in tandem or independently of each other. Q: Monte Carlo simulation Answer: A computerized statistical model that simulates the effects of various types of uncertainty; generates a probability distribution of outcomes that can occur after applying a range of random conditions (or variables) to simulate an event or series of events hundreds or even thousands of times Q: causality Answer: the relationship between two events, where the second is brought about by the first; defines and measures cause and effect Q: trend analysis Answer: An analysis that identifies patterns in past data and then projects these patterns into the future. Q: regression analysis Answer: A statistical technique that is used to estimate relationships between variables. Q: linear regression analysis Answer: A form of regression analysis that assumes that the change in the dependent variable is constant for each unit of change in the independent variable. Q: probability analysis Answer: A technique for forecasting events, such as accidental and business losses, on the assumption that they are governed by an unchanging probability distribution. Q: probability distribution Answer: A presentation (table, chart, or graph) of probability estimates of a particular set of circumstances and of the probability of each possible outcome. Q: theoretical probability