International Risk (RMI 3567) Final Exam Questions with 100 % correct answers |Verified

Design Defect* - Answer-A flaw or deficiency in the design of a product that makes it unreasonably dangerous to users. Can result in product liability where manufacturers/designers may be held responsible for injuries or damages caused by the defective design. Manufacturing Defect* - Answer-A defect that occurs during the manufacturing process, causing a product to deviate from its intended design. Results in unsafe products and manufacturers may be held liable for harm caused to consumers. Marketing Defect* - Answer-Flaws in the way a product is marketed, such as inadequate warnings or instructions, could lead to consumer harm. Manufacturers can be held liability if they fail to provide sufficient information about product risks and proper usage. Employment Practices Liability Insurance(EPLI)* - Answer-Insurance that protects employers against claims made by employees alleging wrongful termination, discrimination, harassment, or other employment-related issues. Helps companies manage the financial risks associated with employment-related lawsuits. Beveridge Healthcare Model (UK)* - Answer-A healthcare system where the government provides healthcare services and funding through taxes. Aims for universal healthcare. Bismarck Healthcare Model (Germany)* - Answer-A healthcare system where healthcare is provided by private providers "sickness funds" and financed through employer and employee contributions. National Health Insurance Model (Canada)* - Answer-A healthcare system where a single public agency is responsible for healthcare financing, but healthcare delivery may involve both public and private providers. Government typically plays a key role in funding and administration. Dependency Ratio* - Answer-The ratio of dependents (young and elderly) to the working-age population in a given area. High dependency ratios can pose economic challenges due to the burden on the working-age population to support the dependents. Annuity* - Answer-A financial product that provides a series of payments made at equal intervals. Often used as a financial tool for retirement planning, offering a steady income stream.Reverse Mortgage* - Answer-A financial product that allows homeowners to convert a portion of their home equity into cash, typically done by seniors. It lets homeowners stay in their homes while receiving streams of payments. In exchange, the lender will eventually own the home. Microinsurance* - Answer-Insurance products designed to provide coverage to low-income individuals and families. Aims to make insurance more accessible to those in developing countries. African Risk Capacity* - Answer-A specialized agency of the African Union that provides insurance coverage to African countries against the impact of extreme weather events and natural disasters. Basis Risk* - Answer-The risk that the value of a financial instrument used for hedging will not move in perfect correlation with the asset being hedged. ex. Parametric payout falls short of covering actual damages caused. Parametric(Index) Insurance* - Answer-Insurance that pays out a predetermined amount based on the occurrence of a specific event, often tied to measurable parameters (wind speed or seismic movement) Group Lending* - Answer-A lending approach where small loans are provided to a group of individuals who are collectively responsible for repayment. Counterparty Risk* - Answer-The risk that the other party in a financial transaction may default on their obligations. Takaful* - Answer-Islamic insurance that operates on the principles of mutual assistance and cooperation. Members contribute "donations" to a pool system to guarantee each other. Sharia outlaws interest, gambling, and uncertainty. Translates to "mutual guarantee." Islamic bonds - no investments in questionable industries.