Intro to Risk Management Que % Ans Graded A+!!!

risk management - ANS process that identifies loss exposures faced by an organization and selects the most appropriate techniques for treating such exposure loss exposure - ANS any situation or circumstance in which a loss is possible, regardless of whether a loss occures identify potential losses measure and analyze the loss exposures select the appropriate combination of techniques for treating the loss exposure implement and monitor the risk management program - ANS risk management process questionnaire - ANS source of information to identify loss exposure measure and analyze loss exposure - ANS estimate the frequency and severity of loss for each type of loss exposure risk control - ANS techniques that reduce the frequency and severity of losses avoidance - ANS certain loss exposure is never acquired, or an existing loss exposure is abandoned ex. draining pool loss prevention - ANS measures that reduce the frequency of a particular loss ex. sensor at best buy loss reduction - ANS measures that reduce the severity of a loss after it occurs ex. sprinkler system for fire risk financing - ANS techniques that provide for the funding of losses retention non-insurance transfers commercial insurance - ANS methods of risk financing retention - ANS the firm retains part or all of the losses that can result from a given loss save on loss costs save on expenses encourage loss prevention increase cash flow - ANS advantages of retention possible higher losses possible higher expenses possible higher taxes - ANS disadvantages of retention non-insurance transfer - ANS method other than insurance by which a pure risk and its potential financial consequences are transferred to another party deductible - ANS a provision by which a specified amount is subtracted form the loss payment otherwise payable to the insured excess insurance policy - ANS one in which the insurer does not participate in the loss until the actual loss exceeds the amount the firm has decided to retain retention - ANS loss frequency is low loss severity is low appropriate risk management technique is ___ loss prevention and retention - ANS loss frequency is high loss severity is low appropriate risk management technique is ___ Insurance - ANS loss frequency is low loss severity is high appropriate risk management technique is ___ Avoidance - ANS loss frequency is high loss severity is high appropriate risk management technique is ___ personal risk management - ANS the identification of pure risks faced by an individual or family, and to the selection of the most appropriate technique for treating such risks same principles applied to corporate risk management apply