EXAM 1 Guide 2022 DR. NYCE Exam 1 Guide (Complete module concepts and terms + 59 Exam 1 review Questions) Risk -uncertainty regarding loss -danger is not the same as risk Categories of Risk -Pure vs. Specular -Static vs. Dynamic -Fundamental vs. Particular -Core vs. Secondary Pure Risk -Only 2 outcomes (loss or no loss) -No possibility of gain -What insurance protects Speculative Risk -Value can go up, down or stay the same -Can be diversified by investing in other things -i....

EXAM 2 Guide DR. NYCE Exam 2 Guide (Complete module concepts and terms + Exam 2 review questions) Risk/ Reward - Individuals - Organizations - Gov't/ Society Individuals (risk/ reward) - Measured using expected utility - How much reward is necessary to induce you to take risk? - Similarly, how much are you willing to pay to avoid risk? This is actually the entire basis of insurance, people willing to pay to avoid risk Ex) - $5 wealth - 50/50 chance of ending up with $1 or $9 dolla...