Exam (elaborations)
RMIN 4000 UGA test 1|111 Answered Questions A+ Graded
- Course
- Institution
RMIN 4000 UGA test 1|111 Answered Questions A+ Graded
[Show more]
Content preview
RMIN 4000 UGA test 1|111 AnsweredQuestions A+ Graded
What is risk? - -a calculated possibility of a negative outcome
- What is calculated possibility? - -a probabilistic outcome that is known or
estimated (ranges from 0% to 100%)
- What is a negative outcome? - -a loss that must be quantifiable
- What is frequency? - -how often a loss occurs (frequency= number of
losses / number of exposures)
- What is severity? - -How much a loss costs when it occurs (severity = total
losses ($) / number of losses)
- What is a peril? - -a cause of a loss (fire, tornado, collision)
- What is a hazard? - -a condition that creates to increases the frequency
and/or severity of a loss but does not cause the loss
- What are the four types of hazards? - -- physical
- moral
- morale
- legal
- What is a physical hazard? - -a physical condition that increases the
frequency and/or severity of a loss (corrosion on pipes, too many wires
plugged in to an outlet)
- what is a moral hazard? - -dishonesty in an individual that increases the
frequency or severity of a loss. the presence of insurance changes the
behavior of the insured (causing "hail" damage with a hammer)
- What is a morale hazard? - -carelessness or indifference to a loss, which
increases the frequency and/or severity of a loss (leaving the car keys in
your unlocked car)
- What is a legal hazard? - -characteristics of the legal systems or regulatory
environment that increase the frequency and/or severity of a loss (juries
being more sympathetic in some areas)
- What is a pure risk? - -a risk in which there is no gain. the outcomes are
either loss or no loss
, - what is speculative risk? - -a risk in which there is a possibility for gain. the
outcomes are either loss, no change, or gain.
- What is the difference between pure and speculative risk? - -with
speculative risk, there is a chance of gain, whereas there is no chance for
gain with pure risk
- can you buy insurance for pure risks? - -yes
- can you buy insurance for speculative risks? - -No
- What is diversifiable risk? - -a risk that affects only individuals or small
groups, not the entire economy. risk is not correlated
- How do you reduce/eliminate diversifiable risk? - -diversification
- What is nondiversifiable risk? - -a risk that affects the entire economy or a
large group of people. this cannot be reduced/eliminated through
diversification. this risk is correlated.
- What is enterprise risk? - -encompasses all major risks faced by a business
firm:
- pure risk
- speculative risk
- strategic risk
- operational risk
- financial risk
- What is systemic risk? - -the risk of collapse of an entire system or market
due to failure of a single entity or group of entities that can result in the
breakdown of the entire financial system. this is due to the interdependency
between the players in the system
- What are the major types of pure risk? - -- personal risk
- property risk
- liability risk
- loss of business income
- cyber security
- What is personal risk? - -a risk that directly affects an individual or family;
involves the possibility of loss of income, extra expenses, or depletion of
financial assets (death, unemployment, disability, injury, inadequate
retirement income)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Nursephil2023. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
62890 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now