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RMIN 4000 Test 1 Brown UGA With Complete Solutions Latest Update
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RMIN 4000 Test 1 Brown UGA With Complete Solutions Latest Update
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RMIN 4000 Test 1 Brown UGA With CompleteSolutions Latest Update
Exposures - correct answers things of value (assets) that could be lost
Perils - correct answers things that cause injury or loss
risk - correct answers a calculated possibility of a negative outcome
Frequency - correct answers the number of losses (such as fire or theft) that occur within a specified time period. aka the
probability of a loss
Severity - correct answers 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 - correct answers a condition that creates or increases the frequency or severity of loss but does NOT cause the
loss.
Physical Hazard - correct answers a physical condition that increases the frequency or severity of loss
Moral Hazard - correct answers the presence of insurance changes the behavior of the insured. ex: making hail damage
to get a check
Morale hazard (attitudinal hazard) - correct answers A condition of carelessness or indifference that increases the
frequency or severity of loss.
Legal Hazard - correct answers 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 - correct answers legal hazard because it increases the severity on
property losses
Pure Risk - correct answers A chance of loss or no loss, but no chance of gain. Insurance can be bought for this
Speculative Risk - correct answers A chance of loss, no loss, or gain.
Diversifiable risk - correct answers 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? - correct answers Pure Risk
diversifiable risk - correct answers 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 - correct answers 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 - correct answers encompasses all major risks faced by a business firm, which include: pure risk,
speculative risk, strategic risk, operational risk, and financial risk
systemic risk - correct answers 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 - correct answers personal risks, property risks, liability risks, loss of business income, cyber-security
risks
Personal risk - correct answers a risk that can directly affect an individual or a family; loss of income, extra expenses, and
depletion of financial assets
Property Risk - correct answers 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)
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