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RMIN 4000 Uga Test 1 UPDATED ACTUAL Exam Questions and CORRECT Answers $9.99
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RMIN 4000 Uga Test 1 UPDATED ACTUAL Exam Questions and CORRECT Answers
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RMIN 4000 Uga Test 1 UPDATED ACTUAL Exam Questions and CORRECT Answers types of risk - CORRECT ANSWER- -pure risk -speculative risk -diversifiable risk -nondiversifiable risk -enterprise risk -systemic risk risk - CORRECT ANSWER- uncertainty concerning the occurrence of a loss

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  • October 18, 2024
  • 12
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • RMIN 4000
  • RMIN 4000

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RMIN 4000 exam 1 UPDATED ACTUAL
Exam Questions and CORRECT Answers
TRIA - CORRECT ANSWER✔✔- Terrorism risk and insurance act (2002)



what is TRIA? - CORRECT ANSWER✔✔- A federal backstop for insurance claims related
to terrorism ; has a trigger of $200M


Exposures - CORRECT ANSWER✔✔- things of value (assets) that could be lost (ex: car)



Perils - CORRECT ANSWER✔✔- things that could happen to these assets/ exposures



Risk Management - CORRECT ANSWER✔✔- how to protect these assets and/or prevent/
reduce loss


Risk - CORRECT ANSWER✔✔- A calculated probability of a negative outcome (has to
have loss and probability)


Pure Risk - CORRECT ANSWER✔✔- 2 future states: a loss or nothing happens



Speculative Risk - CORRECT ANSWER✔✔- 3 future states: loss, nothing happens, or a
gain


Can you buy insurance for a pure risk? - CORRECT ANSWER✔✔- generally yes



Can you buy insurance for speculative risk? - CORRECT ANSWER✔✔- generally no (bc
moral hazard)


Moral Hazard - CORRECT ANSWER✔✔- a hazard where the presence of insurance
changes the behavior of the insured (ex: Bugatti Veyron)

, Fundamental Risk - CORRECT ANSWER✔✔- Risk where an entire economy experiences
loss at the same time (losses are correlated) (ex: pandemic, recession, inflation)


Systemic Risk - CORRECT ANSWER✔✔- instability in a system/ market due to
interdependency between players in the market)


can you buy insurance for a fundamental risk? - CORRECT ANSWER✔✔- generally no



Particular Risk - CORRECT ANSWER✔✔- risk where only 1 or a few people/ firms
experience loss at the same time (losses are not correlated)


can you buy insurance for particular risk? - CORRECT ANSWER✔✔- yes, it is normal to do
so


What are the factors affecting risk? - CORRECT ANSWER✔✔- frequency of the loss,
severity of the loss, exposure, peril, hazard, moral hazard, direct loss, indirect loss


what is a hazard? - CORRECT ANSWER✔✔- something that increases the frequency,
severity, or both within a risk (this itself does not cause loss) (ex: speeding)


what is the difference between a hazard and a peril? - CORRECT ANSWER✔✔- If you take
the thing away and there is still a loss, it is a peril


direct loss - CORRECT ANSWER✔✔- the immediate damage caused by the peril (ex: fire
burned down building)


indirect loss - CORRECT ANSWER✔✔- the result of a direct loss, "secondary effect" (ex: a
fire causes a loss of revenue, higher inventory cost, loss of market share); can end up being
much higher than the direct loss


Risk Attitudes - CORRECT ANSWER✔✔- how we feel about risk ; impacts RM decision
making

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