RMIN 4000 Unit 1 Test 2024 Questions and Answers 100% Correct

exposures - ANSWER-things of value (assets) that could be lost perils - ANSWER-things that could happen to these assets risk management - ANSWER-what do you want to do to protect these assets and/or prevent/reduce losses risk of driving a car - ANSWER-exposure: car peril: car accident risk management: drive safely risk - ANSWER-a calculated possibility of a negative outcome calculated possibility - ANSWER-a probabilistic outcome that is known/established ranges from 0 to 1 (0%-100%) 0/0% = impossible.. no risk .5/50% = highest risk.. most uncertainty 1/100% = certain event.. no risk negative outcome - ANSWER-loss, must be quantifiable ($$$) negative outcome example - ANSWER-Your house burns down. Your house, clothes, appliances, and furniture are quantifiable (you can approximate how much they are worth). Pictures (memories) are not quantifiable frequency - ANSWER-how often a loss occurs the number of losses that occur within a specific time period probability of a loss severity - ANSWER-how much it costs when a loss occurs the dollar amount of loss for a specific peril frequency formula - ANSWER-number of losses / number of exposures severity formula - ANSWER-total losses ($) / number of losses peril - ANSWER-cause of loss ex: fire, tornado, burglary h