RMIN Daniel Brown Test 1 Exam 2026
Questions and Answers
exposure - Correct answer-things of value (assets) that could be lost
Perils - Correct answer-things that could happen to your assets
cause of a loss
risk management - Correct answer-what someone does to protect their assets or
prevent/ reduce their losses
risk - Correct answer-a calculated possibility of a negative outcome
uncertainty concerning the occurrence of a loss
Calculated possibility - Correct answer-a probablilistic outcome that is known or
estimated
ranges from 0 to 1 or a percentage
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,0 impossible event
.5 most uncertainty
1 certain event
frequency - Correct answer-how often a loss occurs
severity - Correct answer-how much a loss costs when it does occur
hazard - Correct answer-condition that creates or increases the frequency or
severity of a loss
does not cause a loss
physical hazard - Correct answer-a physical condition that increases the frequency
or severity of loss
moral hazard - Correct answer-the presence of insurance changes the behavior of
the insured
dishonesty or character defects in an individual that increase the frequency or
severity of loss
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, MoralE hazard - Correct answer-carelessness or indifference to a loss, which
increases the frequency or severity of a loss
legal hazard - Correct answer-characteristics of legal system or regulatory
environment that increase the frequency environment that increase the frequency
and or severity of a loss
pure risk - Correct answer-Loss
or
No Loss
Speculative risk - Correct answer-Loss
or
no loss/no gain
or
gain
diversifiable risk - Correct answer-affects only individuals or small groups
can be reduced/eliminated through diversification
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Questions and Answers
exposure - Correct answer-things of value (assets) that could be lost
Perils - Correct answer-things that could happen to your assets
cause of a loss
risk management - Correct answer-what someone does to protect their assets or
prevent/ reduce their losses
risk - Correct answer-a calculated possibility of a negative outcome
uncertainty concerning the occurrence of a loss
Calculated possibility - Correct answer-a probablilistic outcome that is known or
estimated
ranges from 0 to 1 or a percentage
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,0 impossible event
.5 most uncertainty
1 certain event
frequency - Correct answer-how often a loss occurs
severity - Correct answer-how much a loss costs when it does occur
hazard - Correct answer-condition that creates or increases the frequency or
severity of a loss
does not cause a loss
physical hazard - Correct answer-a physical condition that increases the frequency
or severity of loss
moral hazard - Correct answer-the presence of insurance changes the behavior of
the insured
dishonesty or character defects in an individual that increase the frequency or
severity of loss
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, MoralE hazard - Correct answer-carelessness or indifference to a loss, which
increases the frequency or severity of a loss
legal hazard - Correct answer-characteristics of legal system or regulatory
environment that increase the frequency environment that increase the frequency
and or severity of a loss
pure risk - Correct answer-Loss
or
No Loss
Speculative risk - Correct answer-Loss
or
no loss/no gain
or
gain
diversifiable risk - Correct answer-affects only individuals or small groups
can be reduced/eliminated through diversification
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
