RMI 2302 FSU NYCE EXAM 1 Questions And Answers (Verified And Updated)

RMI 2302 FSU NYCE EXAM 1 Questions And Answers (Verified And Updated) Risk Likelihood - answerFrequency - the probability that a loss can occur. What 3 ways can Risk Likelihood be categorized - answerHigh - an event is expected to happen in most circumstances Medium - an even will probably happen in many circumstances Low - an event may occur at some point Risk Impact - answerSeverity - the potential effect that a loss could have if it arises. Risk prevention methods are best applied to what? - answerFrequency of losses Risk reduction methods are best applied to what? - answerSeverity of losses Do risk reduction methods have costs that are both monetary and nonmonetary? - answerYes. It requires putting a value on human life. (Consider how to balance risk/reward of how much it is worth spending to save one life. What is the quality of life if you did save them) The frequency states that there is a 25% chance of 1 accident, a 50% chance of 2 accidents, and a 25% chance of 3 accidents. The severity states that it costs $10,000 per accident. What is the expected loss? - answer(how often it occurs * how bad it is when it occurs) (.25*10,000)+(.50*10,000)+(.25*10,000) = $20,000 Pure risk - answer"will there be a loss or no loss" only involve 2 possible outcomes Speculative Risk - answer"will there be a loss, no loss, or a gain?" What are the eight categories of risk? - answerStatic Dynamic Core Secondary Fundamental Particular Speculative Pure What are the 4 sources of risk? - answerPersonal Property Liability Financial What are the 2 types of Hazards? - answerPhysical (tangible) and Intangible Hazards What are the three types of intangible hazards? - answerMoral Morale Societal What are the three attitudes towards risk? - answerRisk Averse Risk Seeker Risk Neutral What type of attitude is willing to pay more to avoid risk? - answerRisk Averse What are examples of financial statements? - answerDun and Bradstreet (credit reports), SEC-10K report, annual report, balance sheet, and income statement. What do flow chart depict about a company? - answerthe steps it takes to go from raw materials to finished products What do organizational charts depict? - answerthe layout of hierarchy or the organization. "who reports to whom" and "what they are responsible for" What is the last step in the risk management process that is often done first? - answerEvaluate and Review. What are two reasons that potential severity must be measured for? - answer1. A notion of severity is necessary for classify risks.