RMI 211 EXAM 1 - Meek
Risk️ The uncertainty associated with the possibility of a loss occurring.
Insurance Form of Risk️ The property or life that is subject to consideration for insurance coverage.
Loss Exposure️ Any scenario or situation where there is a potential for a loss, regardle...
Risk✔️ The uncertainty associated with the possibility of a loss occurring.
Insurance Form of Risk✔️ The property or life that is subject to consideration for insurance coverage.
Loss Exposure✔️ Any scenario or situation where there is a potential for a loss, regardless of whether it
ultimately occurs.
Objective Risk✔️ The degree of variability between actual losses and expected losses.
Subjective (Perceived) Risk✔️ The uncertainty stemming from an individual's mental state or
perspective regarding potential losses.
Chance of Loss✔️ The likelihood that a certain event will happen; it can be the same for two outcomes
but may involve different levels of objective risk.
Objective Probability✔️ The long-term relative frequency of an event based on the premise of an
infinite number of observations and unchanging underlying conditions.
Subjective Probability✔️ An individual's personal assessment of the likelihood of experiencing a loss.
Peril✔️ The specific cause of a loss.
Hazard✔️ A condition that heightens the likelihood of a loss occurring.
Physical Hazard✔️ A tangible condition that raises the frequency or severity of a loss.
, Moral Hazard✔️ Dishonesty or ethical flaws in an individual that could lead to an increased frequency
or severity of losses.
Attitudinal Hazard✔️ Indifference or carelessness regarding a potential loss, which can lead to an
increase in both the frequency and severity of such losses.
Legal Hazard✔️ Aspects of the legal system or regulatory framework that can increase the likelihood or
severity of losses.
Pure Risk✔️ A situation that offers only the potential for loss or no loss at all (e.g., an earthquake).
Speculative Risk✔️ A situation where there exists the potential for either profit or loss (e.g., gambling).
Diversifiable Risk✔️ Risks that impact only individuals or small groups and can be minimized or
eliminated through diversification (e.g., car theft).
Non-Diversifiable Risk✔️ Risks that affect the larger economy or many individuals within that economy;
also known as fundamental risks (e.g., hurricanes).
Enterprise Risk✔️ This term covers all significant risks encountered by a business, including pure,
speculative, strategic, operational, and financial risks.
Strategic Risk✔️ Uncertainty related to a firm's financial goals and objectives.
Operational Risk✔️ Risks arising from the day-to-day operations of a firm.
Financial Risk✔️ Uncertainty of loss resulting from unfavorable changes in commodity prices, interest
rates, foreign exchange rates, or monetary value.
Systemic Risk✔️ The risk that the failure of a single entity or group could lead to the collapse of an
entire system or market, potentially destabilizing the broader financial infrastructure.
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 CertifiedGrades. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.39. You're not tied to anything after your purchase.
