Fin 3204 exam 1 - Study guides, Class notes & Summaries

FIN 3204 Exam 1 Questions & Answers 2023/2024 Ratemaking - ANSWER-refers to the pricing of insurance and the calculation of insurance premiums Rate - ANSWER-the price per unit of insurance Exposure unit - ANSWER-the unit of measurement used in insurance pricing premium = rate * exposure units Actuary - ANSWER-person who determines rates and premiums Underwriting - ANSWER-refers to the process of selecting, classifying, and pricing applicants for insurance Statement of underw...

FIN 3204-Exam 1 Questions & Answers 2023/2024 Experience rating plan - ANSWER-Class or manual rate is adjusted upward/downward based on past loss experience Risk - ANSWER-Uncertainty concerning the occurrence of a loss Risk (In finance/economic terms) - ANSWER-Where probabilities of possible outcomes are known Uncertainty - ANSWER-Used in situations where such probabilities cannot be estimated Loss exposure - ANSWER-any situation or circumstance in which a loss is possible, regard...

FIN 3204 Exam #1 - Vocabulary & Concepts What is the traditional definition of risk? - ANSWER-uncertainty concerning the occurrence of a loss True or False: In finance, "risk" is used in situations where the probabilities of possible outcomes are known. - ANSWER-True Objective Risk - ANSWER-the relative variation of actual loss from expected loss (Law of Large numbers applies b/c more exposure = greater predictability) Loss Exposure - ANSWER-any situation or circumstance in which a...