RMI 211 EXAM 1 – Meek Study Guide with Complete Solutions
4 views 0 purchase
Course
RMI 211
Institution
RMI 211
RMI 211 EXAM 1 – Meek Study Guide
with Complete Solutions
Risk - Answer️️ -uncertainty concerning the occurrence of a loss
Insurance form of risk - Answer️️ -the property or life that is being
considered for insurance
Loss exposure - Answer️️ -any situation or circumstance in whi...
RMI 211 EXAM 1 – Meek Study Guide
with Complete Solutions
Risk - Answer✔️✔️-uncertainty concerning the occurrence of a loss
Insurance form of risk - Answer✔️✔️-the property or life that is being
considered for insurance
Loss exposure - Answer✔️✔️-any situation or circumstance in which a loss is
possible, regardless of whether a loss occurs
Objective risk - Answer✔️✔️-the relative variation of actual loss from
expected loss
Subjective (perceived) risk - Answer✔️✔️-uncertainty based on a person's
mental condition or state of mind
Chance of loss - Answer✔️✔️-the probability that an event will occur; can be
same for two outcomes but may have different objective risks
Objective probability - Answer✔️✔️-refers to the long-run relative frequency
of an event based on the assumptions of an infinite number of observations
and of no change in the underlying conditions
Subjective probability - Answer✔️✔️-the individual's personal estimate of a
chance of loss
Hazard - Answer✔️✔️-a condition that increases the chance of loss
Physical hazard - Answer✔️✔️-a physical condition that increases the
frequency or severity of a loss
Moral hazard - Answer✔️✔️-dishonesty or character defects in an individual
that increases the frequency or severity of a loss
Attitudinal hazard - Answer✔️✔️-carelessness or indifference to a loss,
which increases the frequency or severity of a loss
Legal hazard - Answer✔️✔️-refers to characteristics of the legal system or
regulatory environment that increase the frequency or severity of losses
Pure risk - Answer✔️✔️-a situation in which there are only the possibilities
of loss or no loss (earthquake)
Speculative risk - Answer✔️✔️-a situation in which either profit or loss is
possible (gambling)
Diversifiable risk - Answer✔️✔️-affects only individuals or small groups;
can be reduced or eliminated by diversification (car theft)
Non-diversifiable risk - Answer✔️✔️-affects the entire economy or large
numbers of persons or groups within an economy; also called a
fundamental risk (hurricane)
Enterprise risk - Answer✔️✔️-encompasses all major risks faced by a
business firm, which include: pure, speculative, strategic, operational, and
financial risk
Strategic risk - Answer✔️✔️-refers to uncertainty regarding the firm's
financial goals and objectives
Operational risk - Answer✔️✔️-results from the firm's business operations
Financial risk - Answer✔️✔️-refers to the uncertainty of loss because of
adverse changes in commodity prices, interest rates, foreign exchange
rates, and the value of money
Systemic risk - Answer✔️✔️-the risk of collapse of an entire system or
market due to the failure of a single entity or group of entities that can
result in the breakdown of the entire financial system
Personal risks - Answer✔️✔️-risks that directly affect an individual or
family; involve the possibility of a loss or reduction in income, extra
expenses or depletion of financial assets due to premature death,
inadequate retirement income, poor health, or unemployment
Property risks - Answer✔️✔️-involve the possibility of losses associated with
the destruction or theft of property
Direct loss - Answer✔️✔️-a financial loss that results from the physical
damage, destruction, or theft of the property, such as fire damage to a
home
3
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 SophiaBennett. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.99. You're not tied to anything after your purchase.
