RMI Test Questions Answered Correctly Latest

RMI Test Questions Answered Correctly Latest Why should we measure loss severity? - Answers risk classification determination of transfer (insurance) amount Which of the following is a common pre-loss objective? - Answers economy Insurance is a mechanism for managing - Answers pure risk Risk at the individual level can best be defined as - Answers Uncertainty regarding loss Hazards may be categorized by which of the following groups? - Answers Tangible (Physical) and intangible Donna has a home that is insured to its maximum value. She often leaves the door unlocked in case she forgets her keys. She knows that her insurance policy will pay for any losses if her home is robbed. Which of the following best applies to Donna? - Answers moral/morale hazard The ranking of risks by severity is important because: I. An idea of severity can help classify risks faced by an organization II. Severity can help determine the amount of insurance needed III. Severity can establish how often a risk faced by a company will occur - Answers I and II Which of the following is the last step in the risk management process (but often done first)? - Answers Review and Evaluate When considering the risk involved in a specific activity, - Answers Danger and Risk are not always correlated The scientific approach to dealing with risk is called - Answers Risk Management Risk prevention methods are best applied to? - Answers high frequency losses Karen won't allow any of the neighborhood children into her yard because she has a large swimming pool and doesn't want anyone to fall in, resulting in her being responsible for the harm of a child. What type of risk is Karen trying to avoid? - Answers liability Which of the following is not a category of risk retention? - Answers primary versus secondary How does the mathematical measure of Standard Deviation help risk mangers? - Answers It measures the difference between what is expected to happen and what actually happens Static risks - Answers Do not change over time Which of the following is NOT a method of categorizing risk? - Answers certain versus uncertain Imagine a world where health insurance doesn't exist. On the upside, you don't have to pay any health insurance premiums! On the downside, if you become sick you're responsible for the full amount of your healthcare. What if you had children? The risk of unknown payments for healthcare would require all of us to save a much larger amount of money to set aside just in case we needed it. This burden would be in which of the following categories? - Answers need for larger emergency funds Loss frequency describes which of the following? - Answers number of losses According to "Scientific View of Risk" most risks are relative. What does this mean? - Answers Any given risk should be weighed with other risks or lost benefits that can result from attempts to reduce the given risk. According to "Innovation Risk: How to Make Smarter Decisions", which one of the following was NOT one of the simultaneous factors of the recent financial crisis? - Answers High interest rates "Innovation Risk: How to Make Smarter Decisions" says that models can only be meaningfully evaluated as a triplet. What does this mean? - Answers Equal consideration must be given to the model, application, and user. According to "Innovation Risk: How to Make Smarter Decisions", the infrastructure should be changed based on every new innovation. - Answers False - There are frequent innovation to infrastructure so the changes to infrastructure would be constant. According to "Innovation Risk: How to Make Smarter Decisions", which of the following is NOT one of the five rules of thumb to minimizing risk? - Answers Determine which risks are being faced As an application of the "number of days" lost measure of risk discussed in "Scientific View of Risk" consider the following 2015 statistic. Today's life expectancy is well into the 80s. What percentage of life-long smokers die before the age of 70? - Answers 50% Greg and Emily were tasked with developing a model of how an individual may purchase lottery tickets. Greg's model for determining ticket purchases incorrectly assumes all people are equally likely to play the lottery. Emily's model correctly assumed that lottery ticket purchases vary with income and education levels and found very different results than Greg's model. Which of the following describes Greg's model? - Answers Incorrect From the reading "Innovation Risk", the characteristics of a sound mathematical model include all of the following EXCEPT: - Answers fewer than three variables In the lecture, we applied some of the concepts of the article "Innovation Risk" to self-drive cars. Which of the following was NOT one of the rewards discussed with self-drive cars? - Answers increased driver error "Risk management is fundamentally a question of values. In a democratic society, there is no acceptable way to make these choices without involving the citizens who will be affected by them." What does this statement mean? - Answers Everyone possibly affected by a risk should have a say in the reduction or response to a risk. What is a main criticism of the mainstream media by risk professionals regarding risk? - Answers The public often ends up underestimating common risks and exaggerating low risks. The reading "A Scientific View of Risk" has a different definition of risk than we have used in