RMIN 4000 Final Exam 2024 Questions & Answers 100% Verified!

Peril - ANSWER-Cause of loss Risk - ANSWER-Uncertainty about chance, timing, or amount of loss Chance of Loss - ANSWER-Probability that an event will occur Objective Risk - ANSWER-The relative variation of actual loss from expected loss; (Actual-Expected)/Expected; higher variation means higher risk Law of Large Numbers - ANSWER-Objective risk varies inversely with the square root of the number of cases Subjective Risk - ANSWER-Uncertainty based on a person's mental condition or state of mind Hazard - ANSWER-A condition that increased the frequency or severity of the loss Moral Hazard - ANSWER-Arson Morale Hazard - ANSWER-Driving drunk Pure risk - ANSWER-Chance of loss or no loss (no gain) Speculative risk - ANSWER-Chance of loss, no loss, or gain Particular risk - ANSWER-Risk that affects only affects individuals as individuals Legal hazard - ANSWER-Large damage awards in litigation Fundamental/systematic risk - ANSWER-Affects a large number of individuals or the entire economy Enterprise risk - ANSWER-All major risks faced by a business Direct loss (property) - ANSWER-Financial loss that results from physical damage, destruction, or theft Indirect loss (property) - ANSWER-Financial loss arising from loss of USE of property