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RMI3011 Exam 1 FSU RMI 3011 Florida State University -Question and answers rated A+
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RMI3011 Exam 1 FSU RMI 3011 Florida State University -Question and answers rated A+ Traditionally, risk has been defined as A) any situation in which the probability of loss is one. B) any situation in which the probability of loss is zero. C) uncertainty concerning the occurrence of loss. D) ...

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  • December 1, 2024
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  • 2024/2025
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  • rmi3011 exam 1 fsu
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RMI3011 Exam 1 FSU Question and
answers rated A+
Traditionally, risk has been defined as
A) any situation in which the probability of loss is one.
B) any situation in which the probability of loss is zero.
C) uncertainty concerning the occurrence of loss.
D) the probability of a loss occurring - correct answer ✔C) uncertainty
concerning the occurrence of loss.


Objective risk is defined as
A) the probability of loss.
B) the relative variation of actual loss from expected loss.
C) uncertainty based on a person's mental condition or state of mind.
D) the cause of loss. - correct answer ✔B) the relative variation of actual loss
from expected loss.


An insurance company estimates its objective risk for 10,000 exposures to be
10 percent. Assuming the probability of loss remains the same, what would
happen to the objective risk if the number of exposures were to increase to 1
million?
A) It would decrease to 1 percent.
B) It would decrease to 5 percent.
C) It would remain the same.
D) It would increase to 20 percent. - correct answer ✔A) It would decrease to
1 percent.


Uncertainty based on a person's mental condition or state of mind is known as

,A) objective risk.
B) subjective risk.
C) objective probability.
D) subjective probability. - correct answer ✔B) subjective risk


The long-run relative frequency of an event based on the assumption of an
infinite number of observations with no change in the underlying conditions is
called
A) objective probability.
B) objective risk.
C) subjective probability.
D) subjective risk. - correct answer ✔A) objective probability.


Which of the following statements about a priori probabilities is correct?
A) They are subjective probabilities based on ambiguity in the way probability
is perceived.
B) They are subjective probabilities that may vary among individuals because
of factors such as age, gender, education, and the use of alcohol.
C) They are objective probabilities that can be determined by deductive
reasoning.
D) They are objective probabilities that can be determined by subjective
reasoning. - correct answer ✔C) They are objective probabilities that can be
determined by deductive reasoning.


An individual's personal estimate of the chance of loss is
A) an objective probability.
B) an objective risk.
C) a subjective probability.

, D) an a priori probability. - correct answer ✔C) a subjective probability.


A peril is
A) a moral hazard.
B) the cause of a loss.
C) a condition which increases the chance of a loss.
D) the probability that a loss will occur. - correct answer ✔B) the cause of a
loss


An earthquake is an example of
A) a moral hazard.
B) a peril.
C) a physical hazard.
D) an objective risk. - correct answer ✔B) a peril.


Dense fog that increases the chance of an automobile accident is an example
of
A) a speculative risk.
B) a peril.
C) a physical hazard.
D) a moral hazard. - correct answer ✔C) a physical hazard.


Faking an accident to collect insurance proceeds is an example of
A) physical hazard.
B) objective risk.
C) moral hazard.
D) attitudinal hazard. - correct answer ✔C) moral hazard.

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