FSU RMI 3011 EXAM 1 RMI 3011 Florida State University - Question and answers 100% correct

FSU RMI 3011 EXAM 1 Question and
answers 100% correct
Cost Benefit Analysis - correct answer ✔Increase spending one element
reduce spending on another element


- consider direct and indirect
- Spend until cost outweighs benefit
- time value of money


Indirect Loss - correct answer ✔Financial loss arising from loss of use of
property


Property Risk - correct answer ✔- Direct loss
- Indirect loss


Types of property - correct answer ✔-Real property ( Houses)
-Personal Property (Car)
-Intangible property (Patents License)


Personal Risk (Life/health risk) - correct answer ✔- Premature Death
- Insufficient Funds during retirement
- Poor Health
- Unemployment


Enterprise Risk - correct answer ✔A term that encompasses all major risk
faced by business firms

, - Operational Risk
- Financial Risk
- Strategic Risk
- Reputational Risk


Risk - correct answer ✔Traditional Def: Uncertainty


Better Def: Uncertainty about chance, timing or amount of loss.


- Risk of _______ Death
- Risk of house fire
- RIsk of car Accident
- Risk of poor health


Risk has known Probablities


Uncertainty - correct answer ✔Knightian Def: not susceptible to
measurement


Uncertainty = Ambiguity


Speculative risk - correct answer ✔Have three possible outcomes


- Either a gain, loss, or break even


Hazard - correct answer ✔Conditions affecting frequency or severity