PRINCIPLES OF RISK MANAGEMENT AND INSURANCE exm 1
Chamberlain College Of Nursing
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Examen
PRINCIPLES OF RISK MANAGEMENT AND INSURANCE exam 1 Complete Solution
Objective or degree risk 
defined as relative variation of actual loss from expected loss. 
law of large numbers 
number of exposure units increase, the close the actual loss experience will approach the expected 
loss experience. permits insurer to estimate future losses with some accuracy. 
Subjective risk 
uncertainty based on a person's mental condition or state of mind. 
Chance of loss 
defined as probability that event will occur.