RMI 2302 FSU NYCE EXAM 1 (Q&A)
2025/2026 QUESTIONS AND ANSWERS
100% PASS
Risk Likelihood - ANS Frequency - the probability that a loss can occur.
What 3 ways can Risk Likelihood be categorized - ANS High - 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 - ANS Severity - the potential effect that a loss could have if it arises.
Risk prevention methods are best applied to what? - ANS Frequency of losses
Risk reduction methods are best applied to what? - ANS Severity of losses
Do risk reduction methods have costs that are both monetary and nonmonetary? - ANS Yes.
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)
pg. 1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, 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? - ANS (how often it occurs * how bad it is when it occurs)
(.25*10,000)+(.50*10,000)+(.25*10,000) = $20,000
Pure risk - ANS "will there be a loss or no loss"
only involve 2 possible outcomes
Speculative Risk - ANS "will there be a loss, no loss, or a gain?"
What are the eight categories of risk? - ANS Static
Dynamic
Core
Secondary
Fundamental
Particular
Speculative
Pure
What are the 4 sources of risk? - ANS Personal
Property
Liability
Financial
What are the 2 types of Hazards? - ANS Physical (tangible) and Intangible Hazards
pg. 2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
2025/2026 QUESTIONS AND ANSWERS
100% PASS
Risk Likelihood - ANS Frequency - the probability that a loss can occur.
What 3 ways can Risk Likelihood be categorized - ANS High - 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 - ANS Severity - the potential effect that a loss could have if it arises.
Risk prevention methods are best applied to what? - ANS Frequency of losses
Risk reduction methods are best applied to what? - ANS Severity of losses
Do risk reduction methods have costs that are both monetary and nonmonetary? - ANS Yes.
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)
pg. 1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, 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? - ANS (how often it occurs * how bad it is when it occurs)
(.25*10,000)+(.50*10,000)+(.25*10,000) = $20,000
Pure risk - ANS "will there be a loss or no loss"
only involve 2 possible outcomes
Speculative Risk - ANS "will there be a loss, no loss, or a gain?"
What are the eight categories of risk? - ANS Static
Dynamic
Core
Secondary
Fundamental
Particular
Speculative
Pure
What are the 4 sources of risk? - ANS Personal
Property
Liability
Financial
What are the 2 types of Hazards? - ANS Physical (tangible) and Intangible Hazards
pg. 2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
