FSU RMI 3011 EXAM 1 QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS) ALREADY
GRADED A+
Cost Benefit Analysis Ans✓✓✓Increase spending one element reduce
spending on another element
- consider direct and indirect
- Spend until cost outweighs benefit
- time value of money
Indirect Loss Ans✓✓✓Financial loss arising from loss of use of
property
Property Risk Ans✓✓✓- Direct loss
- Indirect loss
Types of property Ans✓✓✓-Real property ( Houses)
-Personal Property (Car)
-Intangible property (Patents License)
Personal Risk (Life/health risk) Ans✓✓✓- Premature Death
- Insufficient Funds during retirement
- Poor Health
- Unemployment
, Enterprise Risk Ans✓✓✓A term that encompasses all major risk faced
by business firms
- Operational Risk
- Financial Risk
- Strategic Risk
- Reputational Risk
Risk Ans✓✓✓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 Ans✓✓✓Knightian Def: not susceptible to measurement
Uncertainty = Ambiguity
DETAILED ANSWERS (VERIFIED ANSWERS) ALREADY
GRADED A+
Cost Benefit Analysis Ans✓✓✓Increase spending one element reduce
spending on another element
- consider direct and indirect
- Spend until cost outweighs benefit
- time value of money
Indirect Loss Ans✓✓✓Financial loss arising from loss of use of
property
Property Risk Ans✓✓✓- Direct loss
- Indirect loss
Types of property Ans✓✓✓-Real property ( Houses)
-Personal Property (Car)
-Intangible property (Patents License)
Personal Risk (Life/health risk) Ans✓✓✓- Premature Death
- Insufficient Funds during retirement
- Poor Health
- Unemployment
, Enterprise Risk Ans✓✓✓A term that encompasses all major risk faced
by business firms
- Operational Risk
- Financial Risk
- Strategic Risk
- Reputational Risk
Risk Ans✓✓✓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 Ans✓✓✓Knightian Def: not susceptible to measurement
Uncertainty = Ambiguity
