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RMI 4115 Exam 1 questions with correct answers
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RMI 4115 Exam 1 questions with correct answers
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RMI 4115 Exam 1 questions with correct answersThe main goal of risk management is..... Correct Answer-To maximize
my standard of living, in the smoothest way possible, over the rest of my
life
What is true of financial planning? Correct Answer-Having a financial
pln helps people reduce financial stress.
You start eating healthy going to the gym to manage health risk although
you don't enjoy the gym. this is.... Correct Answer-risk control, risk
aversion, potentially inefficient use of resources
For what types of risk are insurance most appropriate Correct Answer-
low frequency, high severity
After learning that Erik's grandparents have been diagnosed with cancer,
Erik purchased insurance to cover his potential losses from cancer. Due
to the nature of cancer, his insurance premium include positive premium
loadings. Erik's decision suggests that he is: Correct Answer-risk averse,
paying for loss, transferring risk
Larry thinks that the best way to manage risk is to avoid. In managing
the risk associated with premature death, avoidance is not going to be
easy because Correct Answer-eliminating probability of death is not
possible
, facing the same expected loss, a risk averse person will generally...
Correct Answer-buy more insurance than someone who is risk neutral
Suppose an insurance company has 200,000 (200K) policyholders. Last
year, 50,000 (50K) policyholders filed the claim with the average claim
size of $4,000. This company's target profit is 15%. Based on this
information only, the adequate premium for this company would be:
Correct Answer-50/200X4000X1.15
what can increase an insurance companies premiums Correct Answer-
inc in moral hazard of policyholders
Pv of salary , calc eco net worth Correct Answer-
A large U.S. insurance company owned by shareholders has 50,000
policyholders. Last year, 1,200 of those policyholders filed an insurance
claim, and the average claim size was $10,000. The target profit for this
insurance company is 10%. Solve questions only based on the
information given. Correct Answer-1200/50000X10000X1.1
If the insurance company expects next year's losses to deviate from
estimated losses more than this year, everything else equal, the company
would increase ___________ on its premiums. Correct Answer-risk
charge
insurers ownership changes from stock to mutual what will change
everything else equal? Correct Answer-profit target
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