FIN 341 LIEBENBERG OLE MISS FINAL
Exposure- Answers - Degree to which an asset, individual, or organization is susceptible to potential harm or
loss
Objective- Answers - Goals set by an organization to identify, assess, and mitigate risks ettectively
Subjective- Answers - Individual's perception of risk, which may vary from person to person
Peril- Answers - Specific event or cause of loss that may trigger a claim under an insurance policy
Various Hazards- Answers - Conditions or situations that increase the likelihood of a peril occurring
Pure Risk- Answers - Possibility of loss but no opportunity for gain, insurable
Speculative Risk- Answers - Possibility of both loss and gain, typically not insurable
diversifiable risk (unsystematic risk)- Answers - Diversifiable risk can be reduced through
diversification
Non-Diversifisable- Answers - non-diversifiable risk cannot be eliminated through diversification
Enterprise Risk Management- Answers - Holistic approach to managing all types of risks across an
organization, considering strategic and operational risks
Systemic- Answers - Risks that can impact an entire system or market, often beyond individual control
Personal Risk- Answers - Personal risk involves risks to individuals
Commercial Risk- Answers - pertains to risks faced by business
Indirect Risk- Answers - Risk that results from broader economic or environmental factors
Direct Risk- Answers - Direct risk is associated with a specific event,
Property Risk- Answers - Property risk involves potential loss or damage to physical assets
Liability Risk- Answers - Pertains to potential legal claims against an individual or organization
Cost of Risk- Answers - All expenses associated with managing and financing risks, such as insurance
premiums, deductibles, and uninsured losses
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, Identification- Answers - Methods for identifying risks include surveys, checklists, historical data analysis,
and brain- storming
Evaluation- Answers - Risk measures include mean, median, mode, variance, standard deviation, and coeflcient
of variation
Technique Selection- Answers - Firms can avoid, control, retain, or transfer risks based on factors like
risk tolerance and financial capacity
Implementation and Monitoring- Answers - Ongoing process of implementing risk
management strategies and continuously monitoring for changes or new risks
Insurance- Answers - Contract that provides financial protection against specified risks, includes risk pooling,
premium payments, and indemnification
Ideally Insurable Risks- Answers - Specific, measurable, not catastrophic, random, and have a large
number of homogeneous exposure units
2/9
Exposure- Answers - Degree to which an asset, individual, or organization is susceptible to potential harm or
loss
Objective- Answers - Goals set by an organization to identify, assess, and mitigate risks ettectively
Subjective- Answers - Individual's perception of risk, which may vary from person to person
Peril- Answers - Specific event or cause of loss that may trigger a claim under an insurance policy
Various Hazards- Answers - Conditions or situations that increase the likelihood of a peril occurring
Pure Risk- Answers - Possibility of loss but no opportunity for gain, insurable
Speculative Risk- Answers - Possibility of both loss and gain, typically not insurable
diversifiable risk (unsystematic risk)- Answers - Diversifiable risk can be reduced through
diversification
Non-Diversifisable- Answers - non-diversifiable risk cannot be eliminated through diversification
Enterprise Risk Management- Answers - Holistic approach to managing all types of risks across an
organization, considering strategic and operational risks
Systemic- Answers - Risks that can impact an entire system or market, often beyond individual control
Personal Risk- Answers - Personal risk involves risks to individuals
Commercial Risk- Answers - pertains to risks faced by business
Indirect Risk- Answers - Risk that results from broader economic or environmental factors
Direct Risk- Answers - Direct risk is associated with a specific event,
Property Risk- Answers - Property risk involves potential loss or damage to physical assets
Liability Risk- Answers - Pertains to potential legal claims against an individual or organization
Cost of Risk- Answers - All expenses associated with managing and financing risks, such as insurance
premiums, deductibles, and uninsured losses
1/9
, Identification- Answers - Methods for identifying risks include surveys, checklists, historical data analysis,
and brain- storming
Evaluation- Answers - Risk measures include mean, median, mode, variance, standard deviation, and coeflcient
of variation
Technique Selection- Answers - Firms can avoid, control, retain, or transfer risks based on factors like
risk tolerance and financial capacity
Implementation and Monitoring- Answers - Ongoing process of implementing risk
management strategies and continuously monitoring for changes or new risks
Insurance- Answers - Contract that provides financial protection against specified risks, includes risk pooling,
premium payments, and indemnification
Ideally Insurable Risks- Answers - Specific, measurable, not catastrophic, random, and have a large
number of homogeneous exposure units
2/9
