UGA RMIN 4000 EDMUNDS EXAM 1 LATEST 2026
QUESTIONS and CORRECT DETAILED ANSWERS
ALREADY GRADED A+
what are some risk control tactics? - CORRECT ANSWER-loss prevention
(employee training or safety equipment to reduce frequency), loss reduction
(sprinkler heads for fires to reduce severity) , duplication, separation,
diversification, and avoidance (never acquire loss exposure (proactive) or
abandon loss (reactive))
what are some risk financing tactics? - CORRECT ANSWER-retention (retaining
part or all of losses from a risk), noninsurance risk transfer (risk is given to party
other than insurance company), and insurance (transfer risk to insurer in
exchange for a premium cost)
insurance - CORRECT ANSWER-pooling of accidental losses by transfer of risks
to insurers, who agree to compensate insureds for such losses, to provide
monetary benefits on their occurrence, or to render services connected to the
risks
basic characteristics of insurance - CORRECT ANSWER-pooling of losses,
payment of fortuitous losses, risk transfer, and indemnification
, pooling of losses - CORRECT ANSWER-spreading the losses of a few over an
entire group (reduces variation which reduces uncertainty)
risk - CORRECT ANSWER-uncertainty concerning the occurrence of a loss (or
calculated possibility of a negative outcome)
loss exposure - CORRECT ANSWER-any situation where a loss is possible (does
not have to occur)
loss frequency - CORRECT ANSWER-how often a loss occurs within a specific
period (probability)
formula to find frequency - CORRECT ANSWER-# of losses/# of exposures
loss severity - CORRECT ANSWER-how much does a loss cost when it occurs (a
house fire costs $x)
formula to find severity - CORRECT ANSWER-total losses in dollars/# of losses
Peril - CORRECT ANSWER-cause of loss (fire, windstorm, flood)
QUESTIONS and CORRECT DETAILED ANSWERS
ALREADY GRADED A+
what are some risk control tactics? - CORRECT ANSWER-loss prevention
(employee training or safety equipment to reduce frequency), loss reduction
(sprinkler heads for fires to reduce severity) , duplication, separation,
diversification, and avoidance (never acquire loss exposure (proactive) or
abandon loss (reactive))
what are some risk financing tactics? - CORRECT ANSWER-retention (retaining
part or all of losses from a risk), noninsurance risk transfer (risk is given to party
other than insurance company), and insurance (transfer risk to insurer in
exchange for a premium cost)
insurance - CORRECT ANSWER-pooling of accidental losses by transfer of risks
to insurers, who agree to compensate insureds for such losses, to provide
monetary benefits on their occurrence, or to render services connected to the
risks
basic characteristics of insurance - CORRECT ANSWER-pooling of losses,
payment of fortuitous losses, risk transfer, and indemnification
, pooling of losses - CORRECT ANSWER-spreading the losses of a few over an
entire group (reduces variation which reduces uncertainty)
risk - CORRECT ANSWER-uncertainty concerning the occurrence of a loss (or
calculated possibility of a negative outcome)
loss exposure - CORRECT ANSWER-any situation where a loss is possible (does
not have to occur)
loss frequency - CORRECT ANSWER-how often a loss occurs within a specific
period (probability)
formula to find frequency - CORRECT ANSWER-# of losses/# of exposures
loss severity - CORRECT ANSWER-how much does a loss cost when it occurs (a
house fire costs $x)
formula to find severity - CORRECT ANSWER-total losses in dollars/# of losses
Peril - CORRECT ANSWER-cause of loss (fire, windstorm, flood)
