RMI2302 Exam Questions and Answers
Graded A+
Risk - Correct answer-Uncertainty regarding loss
Danger (does/does not) equate risk - Correct answer-Danger does not equal risk
risk is measured by: - Correct answer-1. frequency/likelihood
2. Severity/impact
3. Expected value/loss
4. Risk Profile
Relative variation of actual from expected loss measured by: - Correct answer-
Variation or Standard Deviation
Uncertainty - Correct answer-doubt about our ability to predict future outcomes
Uncertainty (can/cannot) differ across individuals even when risk is same - Correct
answer-Uncertainty can differ across individuals even when risk is same
Information (does/does not) alter risk (objective) but can alter uncertainty - Correct
answer-Information does not alter risk (objective) but can alter uncertainty
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,Reduction in certainty (can/cannot) be a good thing - Correct answer-Reduction in
certainty can be a good thing
CATEGORIES OF RISK - Correct answer-1. Pure v. Speculative
2. Static v. Dynamic
3. Fundamental v. Particular
4. Core v. Secondary
SOURCES OF RISK - Correct answer-1. Personal Risk
2. Property Risk
3. Liability Risks
4. Financial Risks
Exposure - Correct answer-person or property facing risk or loss
peril - Correct answer-immediate cause of loss
hazard - Correct answer-condition affecting the perils (frequency or severity of
loss)
physical hazards - Correct answer-property conditions
moral hazard - Correct answer-behavioral changes
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, morale hazard - Correct answer-indifference
societal hazards - Correct answer-legal or cultural
risk neutral - Correct answer-indifferent toward risk, value of risky situation is
expected loss
risk averse - Correct answer-prefer to avoid risk, willing to pay more than expected
loss to avoid risk
risk seeker - Correct answer-prefer risk, would pay more than expected return to
engage in risky situation
BURDEN OF RISK ON SOCIETY - Correct answer-1. need for larger emergency
funds
2. loss os needed goods and services
3. fear and worry
risk management - Correct answer-scientific approach to dealing with risk
RISK MANAGEMENT PROCESS - Correct answer-1. Determination of
objectives
2. Identification of risks
3. evaluation of risks
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Graded A+
Risk - Correct answer-Uncertainty regarding loss
Danger (does/does not) equate risk - Correct answer-Danger does not equal risk
risk is measured by: - Correct answer-1. frequency/likelihood
2. Severity/impact
3. Expected value/loss
4. Risk Profile
Relative variation of actual from expected loss measured by: - Correct answer-
Variation or Standard Deviation
Uncertainty - Correct answer-doubt about our ability to predict future outcomes
Uncertainty (can/cannot) differ across individuals even when risk is same - Correct
answer-Uncertainty can differ across individuals even when risk is same
Information (does/does not) alter risk (objective) but can alter uncertainty - Correct
answer-Information does not alter risk (objective) but can alter uncertainty
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Reduction in certainty (can/cannot) be a good thing - Correct answer-Reduction in
certainty can be a good thing
CATEGORIES OF RISK - Correct answer-1. Pure v. Speculative
2. Static v. Dynamic
3. Fundamental v. Particular
4. Core v. Secondary
SOURCES OF RISK - Correct answer-1. Personal Risk
2. Property Risk
3. Liability Risks
4. Financial Risks
Exposure - Correct answer-person or property facing risk or loss
peril - Correct answer-immediate cause of loss
hazard - Correct answer-condition affecting the perils (frequency or severity of
loss)
physical hazards - Correct answer-property conditions
moral hazard - Correct answer-behavioral changes
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, morale hazard - Correct answer-indifference
societal hazards - Correct answer-legal or cultural
risk neutral - Correct answer-indifferent toward risk, value of risky situation is
expected loss
risk averse - Correct answer-prefer to avoid risk, willing to pay more than expected
loss to avoid risk
risk seeker - Correct answer-prefer risk, would pay more than expected return to
engage in risky situation
BURDEN OF RISK ON SOCIETY - Correct answer-1. need for larger emergency
funds
2. loss os needed goods and services
3. fear and worry
risk management - Correct answer-scientific approach to dealing with risk
RISK MANAGEMENT PROCESS - Correct answer-1. Determination of
objectives
2. Identification of risks
3. evaluation of risks
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
