RMIN Final (questions with correct
answers) 2025 updated
Summary of Brads presentation - correct answer ✔✔Few folks have retirement
savings (1/3) -Super Bowl ad
Longevity is the greatest financial risk to an individual
Elements of risk treatment - correct answer ✔✔Avoidance
Loss control (prevention or reduction)
Financing (retention or transfer)
Risk Retention - correct answer ✔✔Pay for losses directly out of organizations
funds: retain risk
Internal funding for risk retention - correct answer ✔✔Cash flow (current
expensing)
Reserve
Captive insurance company
External funds for risk retention - correct answer ✔✔Debt
Equity
Types of risk transfer - correct answer ✔✔1. Insurance
, 2. Hedging (forwards, futures, options)
3. Other contractual transfers (liability waivers, indemnify and hold harmless
agreements
low severity, low frequency - correct answer ✔✔retain risk
high severity, low frequency - correct answer ✔✔Loss reduction/ transfer
Low Severity, High Frequency - correct answer ✔✔prevent and retain
high severity, high frequency - correct answer ✔✔avoidance and control
How to decide on retention vs insurance - correct answer ✔✔Cost benefit
analysis.
Insurance costs more than retention because of the loading, but also provides
benefits in terms of reducing variability and providing services
Consider impacts of firm-specific factors
Retain reasonably predictable losses and insure large disruptive losses
Benefits of risk transfer - correct answer ✔✔Lower likelihood of financial distress
(decreases bankruptcy costs, improves terms with stakeholders)
Lower likelihood of having to raise new funds to: pay for losses and/or finance
new projects
answers) 2025 updated
Summary of Brads presentation - correct answer ✔✔Few folks have retirement
savings (1/3) -Super Bowl ad
Longevity is the greatest financial risk to an individual
Elements of risk treatment - correct answer ✔✔Avoidance
Loss control (prevention or reduction)
Financing (retention or transfer)
Risk Retention - correct answer ✔✔Pay for losses directly out of organizations
funds: retain risk
Internal funding for risk retention - correct answer ✔✔Cash flow (current
expensing)
Reserve
Captive insurance company
External funds for risk retention - correct answer ✔✔Debt
Equity
Types of risk transfer - correct answer ✔✔1. Insurance
, 2. Hedging (forwards, futures, options)
3. Other contractual transfers (liability waivers, indemnify and hold harmless
agreements
low severity, low frequency - correct answer ✔✔retain risk
high severity, low frequency - correct answer ✔✔Loss reduction/ transfer
Low Severity, High Frequency - correct answer ✔✔prevent and retain
high severity, high frequency - correct answer ✔✔avoidance and control
How to decide on retention vs insurance - correct answer ✔✔Cost benefit
analysis.
Insurance costs more than retention because of the loading, but also provides
benefits in terms of reducing variability and providing services
Consider impacts of firm-specific factors
Retain reasonably predictable losses and insure large disruptive losses
Benefits of risk transfer - correct answer ✔✔Lower likelihood of financial distress
(decreases bankruptcy costs, improves terms with stakeholders)
Lower likelihood of having to raise new funds to: pay for losses and/or finance
new projects
