AIDA 182 FINAL EXAM NEWEST 2026 (GRADED A+ 100% VERIFIED ANSWERS)
What is true of the loss ratio method in establishing bulk reserves for INBR losses? -
ANSWER-The loss ratio method should only be used for the first year or two after losses are
incurred.
Which one of the following statements regarding the calculation of the reserve for
unallocated loss adjustment expenses is accurate? - ANSWER-It is usually estimated as a
percentage of the sum of incurred losses and allocated loss adjustment expenses.
Hazard analysis is what? - ANSWER-A method that identifies conditions that increase the
frequency or severity of loss.
What is the least effective method of identifying all personal property loss exposures? -
ANSWER-Loss histories.
Risk quadrants are different from risk classifications. Risk quadrants focus on what? -
ANSWER-The source of the risk itself and what part of the organization has managed it in the
past.
An enterprise risk management approach is categorizing risks into quadrants. What are
hazard risks? - ANSWER-Normally managed by risk management professionals.
What are the four risks in the enterprise risk management model? - ANSWER-Hazard,
operational, financial, and hazard.
,What risk quadrant is the change of stocks or bonds values because interest rate changes
in? - ANSWER-Financial risks.
What is true of pure and speculative risks? - ANSWER-All businesses involve speculative
risks.
What is true of diversifiable and nondiversifiable risks? - ANSWER-Systemic risks are
nondiversifiable generally.
What is an example of a strategic risk? - ANSWER-A new computer chip that could give a
company growth.
What is an example of an operational risk? - ANSWER-The ability of suppliers to perform.
What is true of subjective and objective risks? - ANSWER-Subjective risk can be present
where objective risk is not.
What is an example of a speculative risk? - ANSWER-Investing in stock.
What is true of diversifiable versus nondiversifiable risk? - ANSWER-Diversifiable risks are
not correlated and can be managed through diversification or spread of risk.
A company's fleet of cars is worrying the managers liquidity of the company and fuel prices
having an adverse effect is which type of risk quadrant? - ANSWER-Financial risk.
, An employee embezzling funds from a company for not feeling adequately paid is what risk?
- ANSWER-Both a hazard and an operational risk.
Failing to respond to changing customer demands is an example of what risk? - ANSWER-
Strategic risk.
The fear of your home being hit by a storm and damaged or destroyed is what risk for you? -
ANSWER-A subjective risk.
What quadrant of risk is a harmful chemical found in a building with unknown harm to
residents and to the clean up crew part of? - ANSWER-A hazard risk.
Driving instead of flying because of feeling of safety is an example of what? - ANSWER-A
subjective risk.
Investing money in a rental property brings what? - ANSWER-Both speculative and pure
risks. The property values can increase or decrease and the building could burn down.
Increased competition is an example of what? - ANSWER-A strategic risk.
Renovating a warehouse, purchasing a new order processing software, added two new
delivery trucks, and purchasing a production machine which also allows for potential for a
new product line, are all projects. Which project is the most speculative? - ANSWER-The new
production machine.
What is true of the loss ratio method in establishing bulk reserves for INBR losses? -
ANSWER-The loss ratio method should only be used for the first year or two after losses are
incurred.
Which one of the following statements regarding the calculation of the reserve for
unallocated loss adjustment expenses is accurate? - ANSWER-It is usually estimated as a
percentage of the sum of incurred losses and allocated loss adjustment expenses.
Hazard analysis is what? - ANSWER-A method that identifies conditions that increase the
frequency or severity of loss.
What is the least effective method of identifying all personal property loss exposures? -
ANSWER-Loss histories.
Risk quadrants are different from risk classifications. Risk quadrants focus on what? -
ANSWER-The source of the risk itself and what part of the organization has managed it in the
past.
An enterprise risk management approach is categorizing risks into quadrants. What are
hazard risks? - ANSWER-Normally managed by risk management professionals.
What are the four risks in the enterprise risk management model? - ANSWER-Hazard,
operational, financial, and hazard.
,What risk quadrant is the change of stocks or bonds values because interest rate changes
in? - ANSWER-Financial risks.
What is true of pure and speculative risks? - ANSWER-All businesses involve speculative
risks.
What is true of diversifiable and nondiversifiable risks? - ANSWER-Systemic risks are
nondiversifiable generally.
What is an example of a strategic risk? - ANSWER-A new computer chip that could give a
company growth.
What is an example of an operational risk? - ANSWER-The ability of suppliers to perform.
What is true of subjective and objective risks? - ANSWER-Subjective risk can be present
where objective risk is not.
What is an example of a speculative risk? - ANSWER-Investing in stock.
What is true of diversifiable versus nondiversifiable risk? - ANSWER-Diversifiable risks are
not correlated and can be managed through diversification or spread of risk.
A company's fleet of cars is worrying the managers liquidity of the company and fuel prices
having an adverse effect is which type of risk quadrant? - ANSWER-Financial risk.
, An employee embezzling funds from a company for not feeling adequately paid is what risk?
- ANSWER-Both a hazard and an operational risk.
Failing to respond to changing customer demands is an example of what risk? - ANSWER-
Strategic risk.
The fear of your home being hit by a storm and damaged or destroyed is what risk for you? -
ANSWER-A subjective risk.
What quadrant of risk is a harmful chemical found in a building with unknown harm to
residents and to the clean up crew part of? - ANSWER-A hazard risk.
Driving instead of flying because of feeling of safety is an example of what? - ANSWER-A
subjective risk.
Investing money in a rental property brings what? - ANSWER-Both speculative and pure
risks. The property values can increase or decrease and the building could burn down.
Increased competition is an example of what? - ANSWER-A strategic risk.
Renovating a warehouse, purchasing a new order processing software, added two new
delivery trucks, and purchasing a production machine which also allows for potential for a
new product line, are all projects. Which project is the most speculative? - ANSWER-The new
production machine.
