RMI 211: Chapter 3 - Introduction to Risk Management Exam Study Guide

RMI 211: Chapter 3 - Introduction to Risk Management Exam Study Guide Risk Management - Answer️️ -a process that identifies loss exposures faced by an organization and selects the most appropriate techniques for treating such exposures Loss Exposure - Answer️️ -any situation or circumstance in which a loss is possible, regardless of whether a loss occurs Pre-Loss Objectives - Answer️️ --Prepare for potential losses in the most economical way -Reduce anxiety -Meet any legal obligations Post-Loss Objectives - Answer️️ --Survival of the firm -Continue operating -Stability of earnings -Continued growth of the firm -Minimize the effects that a loss will have on other persons and on society Loss Frequency - Answer️️ -the probable number of losses that may occur during some given time period loss severity - Answer️️ -the probable size of the losses that may occur ©SOPHIABENNETT@ Sunday, August 25, 2024 2:42 PM 2 Which is more important? Loss severity or Loss Frequency - Answer️️ -Loss Severity maximum possible loss - Answer️️ -the worst loss that could happen to the firm during its lifetime probable maximum loss - Answer️️ -the worst loss that is likely to happen Risk Control - Answer️️ -techniques that reduce the frequency or severity of losses Methods of Risk Control - Answer️️ -avoidan