100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
RMIN 4000 uga test 1 Questions With Revised Answers $12.49   Add to cart
Quickly navigate to
Preview
  2.  
  3. RMIN 4000
  4.  
  5. RMIN 4000

Exam (elaborations)

RMIN 4000 uga test 1 Questions With Revised Answers
 11 views  0 purchase
  • Course
  • RMIN 4000
  • Institution
  • RMIN 4000

©THEBRIGHTSTARS 2024 RMIN 4000 uga test 1 Questions With Revised Answers Types of risk - answer-pure risk -speculative risk -diversifiable risk -nondiversifiable risk -enterprise risk -systemic risk risk - answeruncertainty concerning the occurrence of a loss uncertainty - answerprobabil...

[Show more]

Preview 2 out of 13  pages

Document information

  • September 8, 2024
  • 13
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • rmin 4000 uga test 1 questions with revised answer

Written for

  • RMIN 4000
  • RMIN 4000

Seller

avatar-seller
Brightstars

Content preview

©THEBRIGHTSTARS 2024



RMIN 4000 uga test 1 Questions With
Revised Answers

Types of risk - answer✔✔-pure risk
-speculative risk
-diversifiable risk
-nondiversifiable risk
-enterprise risk
-systemic risk

risk - answer✔✔uncertainty concerning the occurrence of a loss

uncertainty - answer✔✔probabilities cannot be estimated

loss exposure - answer✔✔any situation or circumstance in which a loss is possible, regardless of
whether a loss actually occurs
example: earthquake or flood causing damage to a manufacturing plant

objective risk (degree of risk) - answer✔✔the relative variation of actual loss from expected loss
example:10,000 houses insured of a long period of time and on average 100 houses burn each
year, however it would be rare for exactly 100 to burn each year

law of large numbers - answer✔✔as the number of exposure units increases, the more closely the
actual loss experience will approach the expected loss experience


example: as the number of homes under observation increases, the greater is the degree of
accuracy in predicting the proportion of homes that will burn

subjective risk (perceived risk) - answer✔✔uncertainty based on a person's mental condition or
state of mind

, ©THEBRIGHTSTARS 2024


example: driver with previous convictions for drunk driving tries to drive home and wonders if
he will get arrested by the police or not

chance of loss - answer✔✔the probability that an event will occur

objective probability - answer✔✔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

two ways objective probability can be determined - answer✔✔1) deductive reasoning (priori
probabilities): probability of getting a head from the toss of a perfectly balanced coin is 1/2 bc
there are two sides
2) inductive reasoning: the probability that a person age 21 will die before age 26 cannot be
logically deduced, life insurers can estimate the probability of death and sell a 5 year life
insurance policy for a 21 yr old

subjective probability - answer✔✔the individual's personal estimate of the chance of loss
example: people who buy a lottery ticket on their birthday may believe it is their lucky day and
overestimate the small chance of winning

objective risk - answer✔✔the relative variation of actual loss from expected loss

peril - answer✔✔the cause of loss
example: house burns down, peril is the fire

hazard - answer✔✔condition that creates or increases the frequency or severity of loss

4 types of hazards - answer✔✔1) physical hazard
2) moral hazard
3) attitudinal hazard
4) legal hazard

physical hazard - answer✔✔physical condition that increases the frequency or severity of loss.
example: icy roads that increase chance of automobile accident

moral hazard - answer✔✔dishonesty or character defects in an individual that increase the
frequency or severity of loss
example: faking an accident to collect benefits from an insurer

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

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

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

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 Brightstars. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $12.49. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

77254 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$12.49
  • (0)
  Add to cart