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Study Guide _ Topic 1: Risk and Its Treatment

How is risk defined traditionally?

How is objective risk defined? Can you give an example?

How does the objective risk change when the number of exposures
increase/decrease?

How is subjective risk defined? Can you give an example?

How is objective probability defined?

What is priori probability?

What is subjective probability?

How is peril defined? Can you give an example?

What is a physical hazard? Can you give an example?

What is moral hazard? Can you give an example?

What is morale hazard?

What is a legal hazard? Can you give some example?

What is enterprise risk?

What are the characteristics of financial risk? Can you identify an example of
financial risk?

Can you explain the enterprise risk management program?

What is pure risk? Can you give an example?

What is speculative risk? Does it benefit the society? Can you give an
example?

What is diversifiable risk? Can you give an example?

What is nondiversifiable risk? Can you give some examples?

What is fundamental risk? Can you give some examples?

What is personal risk? Can you give some examples of personal risks?

Why premature death may result in economic insecurity?

What are the consequences of long-term disability?

What is indirect loss? Can you give some examples?

What is liability risk? How does it influence current and future income? Can
you give an example of liability risk?

What are the burdens to society because of the presence of risk?

What does risk control include?

What is risk retention? Can you give an example of it?

What is risk control? Can you give an example of it?

What are the characteristics of risk retention?

What is active/passive retention? Can you give an example?

What is risk avoidance? Can you give an example of risk avoidance?

What is noninsurance risk transfer? Can you give an example?

What is hedging?

What is the relationship between chance of loss and risk (including objective
risk and risk inherent)

What is commercial risk? Can you give an example?

what is self-insurance?

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