RMI 2302 Exam 1 Questions and
Answers Graded A+
There is a great deal of debate regarding what people expect of their government.
Government's may redistribute income through which of the following:
I.Market intervention
II.Transfer payments
III.Taxation - Correct answer-I,II,&III
In module 1 we discussed the six steps of the risk management process. Risk (loss)
Reduction is aimed at: - Correct answer-Severity
Which of the following causes the "invisible hand mechanism" to break down:
I. Positive Externalities
II. Pitfalls in Decision Making
III. Negative Externalities - Correct answer-I & III
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, In module 1 we discussed the six steps of the risk management process. The
primary post-loss objective of an organization is: - Correct answer-Survival
Which term best describes the "information problem" where one party to a
transaction has more/better information about the risk than the other party? -
Correct answer-Adverse Selection
Fed Ex & UPS have thousands of trucks on the road every day. Each of these
trucks are: - Correct answer-An exposure
Which of the following allows individuals to substitute a small certain payment for
a larger uncertain possibility of a loss, in other words, what makes insurance
possible? - Correct answer-Law of Large Numbers
Olivia fails to be careful with her laptop because she purchased the insurance
coverage on it. Olivia's behavior is an example of: - Correct answer-Moral hazard
In module 1 we discussed sources of risk. The possibility of a lawyer being sued
because of giving poor legal advice, is an example of which source of risk: -
Correct answer-Liability
Avoiding risky activity is a method of: - Correct answer-Risk (loss) control
In module 1 we discussed risk (loss) control. Anti-lock brakes in a vehicle are an
example of: - Correct answer-Risk (loss) prevention
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Answers Graded A+
There is a great deal of debate regarding what people expect of their government.
Government's may redistribute income through which of the following:
I.Market intervention
II.Transfer payments
III.Taxation - Correct answer-I,II,&III
In module 1 we discussed the six steps of the risk management process. Risk (loss)
Reduction is aimed at: - Correct answer-Severity
Which of the following causes the "invisible hand mechanism" to break down:
I. Positive Externalities
II. Pitfalls in Decision Making
III. Negative Externalities - Correct answer-I & III
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, In module 1 we discussed the six steps of the risk management process. The
primary post-loss objective of an organization is: - Correct answer-Survival
Which term best describes the "information problem" where one party to a
transaction has more/better information about the risk than the other party? -
Correct answer-Adverse Selection
Fed Ex & UPS have thousands of trucks on the road every day. Each of these
trucks are: - Correct answer-An exposure
Which of the following allows individuals to substitute a small certain payment for
a larger uncertain possibility of a loss, in other words, what makes insurance
possible? - Correct answer-Law of Large Numbers
Olivia fails to be careful with her laptop because she purchased the insurance
coverage on it. Olivia's behavior is an example of: - Correct answer-Moral hazard
In module 1 we discussed sources of risk. The possibility of a lawyer being sued
because of giving poor legal advice, is an example of which source of risk: -
Correct answer-Liability
Avoiding risky activity is a method of: - Correct answer-Risk (loss) control
In module 1 we discussed risk (loss) control. Anti-lock brakes in a vehicle are an
example of: - Correct answer-Risk (loss) prevention
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
