RMI 3011 Exam 1 Questions with
complete solution
Karen won't allow any of the neighborhood children into her yard because she
has a large swimming pool and doesn't want anyone to fall in, resulting in her
being responsible for the harm of a child. What type of risk is Karen trying to
avoid?
liability
property
personal
financial - correct answer ✔liability
Gary works in a factory where the workers are known to leave oily rags all
over the place. Which of the following best describes the oily rags?
moral/morale hazard
physical hazard
societal hazard - correct answer ✔physical hazard
Which of the following is NOT a method of categorizing risk?
pure versus speculative
static versus dynamic
fundamental versus particular
certain versus uncertain - correct answer ✔certain versus uncertain
The process to systematically manage risk exposures is
called______________
Risk Reduction
,Risk Planning
Risk Management
Risk Avoidance - correct answer ✔Risk Management
Hazards may be categorized by which of the following groups?
Primary and secondary
Tangible (Physical) and intangible (Moral)
Objective and subjective
None of the above - correct answer ✔Tangible (Physical) and intangible
(Moral)
Which of the following are common causes of a person losing their ability to
generate income?
I. death
II. injury
III. unemployment - correct answer ✔I, II, and III
Carly is involved in a three-car automobile accident. Which type of risk is this
an example of?
fundamental risk
particular risk
hazard risk
core risk - correct answer ✔particular risk
Loss severity describes which of the following?
number of losses
financial impact of losses
, reputational damage of losses
none of the above - correct answer ✔financial impact of losses
Imagine a world where health insurance doesn't exist. On the upside, you
don't have to pay any health insurance premiums! On the downside, if you
become sick you're responsible for the full amount of your healthcare. What if
you had children? The risk of unknown payments for healthcare would require
all of us to save a much larger amount of money to set aside just in case we
needed it. This burden would be in which of the following categories?
need for larger emergency funds
loss of needed goods and services
fear and worry
less personal savings to spend on desired items - correct answer ✔need for
larger emergency funds
UPS has 10,000 trucks on the road in Florida. In any given year, UPS drivers
are involved in a total of 550 accidents in Florida. What is the chance of loss?
Enter your answer as a percentage (without the % sign), for example if
something happens 1% of the time, enter 1, not .01. If you calculate 3.25%
enter 3.25, not .0325. - correct answer ✔5.5%
If you have a 6% chance of an auto accident and the expected cost of an auto
accident is $12,000, what is your expected loss? Enter you answer as a dollar
amount (no $ sign), for example 500 or 625.50 or 1,240.25 - correct answer
✔720
Multiplying the probability by the outcome and adding them all together is the
description of calculating the:
mode
median
expected value
complete solution
Karen won't allow any of the neighborhood children into her yard because she
has a large swimming pool and doesn't want anyone to fall in, resulting in her
being responsible for the harm of a child. What type of risk is Karen trying to
avoid?
liability
property
personal
financial - correct answer ✔liability
Gary works in a factory where the workers are known to leave oily rags all
over the place. Which of the following best describes the oily rags?
moral/morale hazard
physical hazard
societal hazard - correct answer ✔physical hazard
Which of the following is NOT a method of categorizing risk?
pure versus speculative
static versus dynamic
fundamental versus particular
certain versus uncertain - correct answer ✔certain versus uncertain
The process to systematically manage risk exposures is
called______________
Risk Reduction
,Risk Planning
Risk Management
Risk Avoidance - correct answer ✔Risk Management
Hazards may be categorized by which of the following groups?
Primary and secondary
Tangible (Physical) and intangible (Moral)
Objective and subjective
None of the above - correct answer ✔Tangible (Physical) and intangible
(Moral)
Which of the following are common causes of a person losing their ability to
generate income?
I. death
II. injury
III. unemployment - correct answer ✔I, II, and III
Carly is involved in a three-car automobile accident. Which type of risk is this
an example of?
fundamental risk
particular risk
hazard risk
core risk - correct answer ✔particular risk
Loss severity describes which of the following?
number of losses
financial impact of losses
, reputational damage of losses
none of the above - correct answer ✔financial impact of losses
Imagine a world where health insurance doesn't exist. On the upside, you
don't have to pay any health insurance premiums! On the downside, if you
become sick you're responsible for the full amount of your healthcare. What if
you had children? The risk of unknown payments for healthcare would require
all of us to save a much larger amount of money to set aside just in case we
needed it. This burden would be in which of the following categories?
need for larger emergency funds
loss of needed goods and services
fear and worry
less personal savings to spend on desired items - correct answer ✔need for
larger emergency funds
UPS has 10,000 trucks on the road in Florida. In any given year, UPS drivers
are involved in a total of 550 accidents in Florida. What is the chance of loss?
Enter your answer as a percentage (without the % sign), for example if
something happens 1% of the time, enter 1, not .01. If you calculate 3.25%
enter 3.25, not .0325. - correct answer ✔5.5%
If you have a 6% chance of an auto accident and the expected cost of an auto
accident is $12,000, what is your expected loss? Enter you answer as a dollar
amount (no $ sign), for example 500 or 625.50 or 1,240.25 - correct answer
✔720
Multiplying the probability by the outcome and adding them all together is the
description of calculating the:
mode
median
expected value
