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RMI 3011 Study Guide RMI 3011 Florida State University -Question and answers verified to pass
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RMI 3011 Study Guide RMI 3011 Florida State University -Question and answers verified to pass The main goal of risk management is... a. To eliminate risk b. To minimize negative effects of risk c. To maximize my income d. To ensure that I purchase insurance at the optimal time - correct ans...

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  • December 1, 2024
  • 26
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • rmi 3011 study guide
  • rmi 3011 study guide question and answers verified
  • rmi 3011 study guide rmi 3011 florida state univer

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RMI 3011 Study Guide Question and
answers verified to pass
The main goal of risk management is...


a. To eliminate risk
b. To minimize negative effects of risk
c. To maximize my income
d. To ensure that I purchase insurance at the optimal time - correct answer
✔b. To minimize negative effects of risk


Assume that James, previously the Chief Risk Officer (CRO) of Walmart
(which sells low-cost products), has recently accepted a CRO position at
Macy's (which sells higher-quality products). If his risk management decisions
were to change after moving to Macy's, what might be a reasonable cause of
this change?


a. The financial budget of Macy's is different than that of Walmart.


b. The strategic objectives of Walmart and Macy's are significantly different.


c. There are trade-offs among objectives which affect risk management
decisions.


d. All of the above could be causes of a change in decisions for James. -
correct answer ✔d. All of the above could be causes of a change in
decisions for James.

,Jim's juice factory near Orlando FL has been hit by the Hurricane Irma and an
old machine have been damaged. Jim bought it at $3 million four years ago,
and typically the machine operates for 10 years. He found that a similar
machine would cost him today $4.5 million. What is the actual cash value of
the machine?


a. $4.5 million
b. $3 million
c. $2.7 million
d. $1.5 million
e. $1.8 million - correct answer ✔c. $2.7 million


Associated with the property exposure deriving from ownership of an
automobile, which of the following is a hazard? (use only the information
provided in the question)


a. living in New York (where auto accidents are common) instead of living in
Richland Center, WI (where auto accidents are uncommon)


b. buying a new car, rather than a used car that is in rusty condition


c. installing "the club" which is an anti-theft device


d. all of the above are hazards - correct answer ✔a. living in New York
(where auto accidents are common) instead of living in Richland Center, WI
(where auto accidents are uncommon)


Which party is giving up variability in exchange for certainty under workers'
compensation?

, a. the employer
b. the employee
c. both parties
d. neither party - correct answer ✔c. both parties


Drinkwell, a national drinking water production company, went through a class
action lawsuit on the contaminated drinking water it sold last year. The
customers who filed class action lawsuit asked for $5 billion that will
compensate for physical and emotional damages they felt. In-house lawyer of
Drinkwell argues that the physical damage was at most $0.1 billion because
none of them developed severe cancer. The final ruling from the court was
that Drinkwell pay $8 billion to the customers affected by the drinking water.
Which of the following is true based on this situation?


a. The customers' calculation of $5 billion includes special damages
b. Drinkwell's calculation of special damages were $5 billion c. Drinkwell will
not pay for punitive damages
d. $8 billion dollar doesn't include general damages
e. None of the above - correct answer ✔a. The customers' calculation of $5
billion includes special damages


Assume that Miguel and Mabel are held jointly liable for Chen-Wei's recent
accident. Chen-Wei's losses included $20,000 in lost income, $32,000 in
medical expenses, and $60,000 in emotional distress. Assume this litigation
occurs in a place (jurisdiction) where joint and several liability applies only to
special damages. Other jurisdictions will have different rules. How much is the
maximum Mabel will have to pay if she is found to be 50% at fault and Miguel
is found to be 50% at fault?


a. $0

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