RMI 2302 Exam 1 UPDATED
QUESTIONS AND CORRECT ANSWERS
Risk - CORRECT ANSWER Uncertainty regarding loss. There are different
magnitudes of risk based on the decision maker: individual, organization, and society. Danger
does not equal risk. Information does not alter risk.
Uncertainty - CORRECT ANSWER When you do not know the outcome, there is
uncertainty. Multiple outcomes can also lead to uncertainty. Uncertainty is doubt about our
ability to predict future outcomes. Because uncertainty is subjective, it can differ across
individuals even when the risk is the same. Information can alter uncertainty. Reduction in
uncertainty can be a good thing.
Loss - CORRECT ANSWER what you could have had, but don't, can be considered a
loss.
Risk Likelihood - CORRECT ANSWER Frequency - the probability that a loss can
occur. This can be described as high, medium, or low.
Risk Impact - CORRECT ANSWER Severity - the potential effect that a loss could
have if it arises. The magnitude can also be described as high, medium, or low.
Pure Risk - CORRECT ANSWER "will there be a loss or no loss?" There are clear
expectations. These risks only involve two possible outcomes.
Static Risk - CORRECT ANSWER "is the risk changing through time?" These risks do
not change through time.
Speculative Risk - CORRECT ANSWER "will there be a loss, no loss, or a gain?"
Dynamic Risk - CORRECT ANSWER the chances of something happening now and
happening later are different. They change through time.
, Fundamental Risk - CORRECT ANSWER risks that effect everyone / a large portion
of the population at the same time.
Particular Risk - CORRECT ANSWER risks that effect individuals / a small group of
people at a given time.
Core Risk - CORRECT ANSWER organizational level risk - these are directly
associated with what an organization or business does.
Secondary Risk - CORRECT ANSWER organizational level risk - these have nothing
to do with what an organization or business does.
Personal Risks - CORRECT ANSWER related to life, health, and safety on the
individual level
Property Risks - CORRECT ANSWER related to the potential damage to physical
property / material things / stuff
Liability Risks - CORRECT ANSWER having to take responsibility for your actions /
inactions
Financial Risks - CORRECT ANSWER savings and investments
Intangible Hazards - CORRECT ANSWER attitudes or culture
Moral Hazard - CORRECT ANSWER behavioral changes - effects the frequency /
severity of loss
Morale Hazard - CORRECT ANSWER indifference - effects the frequency / severity
of loss
QUESTIONS AND CORRECT ANSWERS
Risk - CORRECT ANSWER Uncertainty regarding loss. There are different
magnitudes of risk based on the decision maker: individual, organization, and society. Danger
does not equal risk. Information does not alter risk.
Uncertainty - CORRECT ANSWER When you do not know the outcome, there is
uncertainty. Multiple outcomes can also lead to uncertainty. Uncertainty is doubt about our
ability to predict future outcomes. Because uncertainty is subjective, it can differ across
individuals even when the risk is the same. Information can alter uncertainty. Reduction in
uncertainty can be a good thing.
Loss - CORRECT ANSWER what you could have had, but don't, can be considered a
loss.
Risk Likelihood - CORRECT ANSWER Frequency - the probability that a loss can
occur. This can be described as high, medium, or low.
Risk Impact - CORRECT ANSWER Severity - the potential effect that a loss could
have if it arises. The magnitude can also be described as high, medium, or low.
Pure Risk - CORRECT ANSWER "will there be a loss or no loss?" There are clear
expectations. These risks only involve two possible outcomes.
Static Risk - CORRECT ANSWER "is the risk changing through time?" These risks do
not change through time.
Speculative Risk - CORRECT ANSWER "will there be a loss, no loss, or a gain?"
Dynamic Risk - CORRECT ANSWER the chances of something happening now and
happening later are different. They change through time.
, Fundamental Risk - CORRECT ANSWER risks that effect everyone / a large portion
of the population at the same time.
Particular Risk - CORRECT ANSWER risks that effect individuals / a small group of
people at a given time.
Core Risk - CORRECT ANSWER organizational level risk - these are directly
associated with what an organization or business does.
Secondary Risk - CORRECT ANSWER organizational level risk - these have nothing
to do with what an organization or business does.
Personal Risks - CORRECT ANSWER related to life, health, and safety on the
individual level
Property Risks - CORRECT ANSWER related to the potential damage to physical
property / material things / stuff
Liability Risks - CORRECT ANSWER having to take responsibility for your actions /
inactions
Financial Risks - CORRECT ANSWER savings and investments
Intangible Hazards - CORRECT ANSWER attitudes or culture
Moral Hazard - CORRECT ANSWER behavioral changes - effects the frequency /
severity of loss
Morale Hazard - CORRECT ANSWER indifference - effects the frequency / severity
of loss
