RMI Exam Study Guide | 118 Questions with 100% Correct Answers
Why should we measure loss severity? - risk classification determination of transfer (insurance) amount Which of the following is a common pre-loss objective? - economy Insurance is a mechanism for managing - pure risk Risk at the individual level can best be defined as - Uncertainty regarding loss Hazards may be categorized by which of the following groups? - Tangible (Physical) and intangible Donna has a home that is insured to its maximum value. She often leaves the door unlocked in case she forgets her keys. She knows that her insurance policy will pay for any losses if her home is robbed. Which of the following best applies to Donna? - moral/morale hazard The ranking of risks by severity is important because: I. An idea of severity can help classify risks faced by an organization II. Severity can help determine the amount of insurance needed III. Severity can establish how often a risk faced by a company will occur - I and II Which of the following is the last step in the risk management process (but often done first)? - Review and Evaluate When considering the risk involved in a specific activity, - Danger and Risk are not always correlated The scientific approach to dealing with risk is called - Risk Management Risk prevention methods are best applied to? - high frequency losses
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