RMI2302 EXAM QUESTIONS WITH 100%
CORRECT ANSWERS LATEST VERSION
2025/2026.
Risk - ANS Uncertainty regarding loss
Danger (does/does not) equate risk - ANS Danger does not equal risk
risk is measured by: - ANS 1. frequency/likelihood
2. Severity/impact
3. Expected value/loss
4. Risk Profile
Relative variation of actual from expected loss measured by: - ANS Variation or Standard
Deviation
Uncertainty - ANS doubt about our ability to predict future outcomes
Uncertainty (can/cannot) differ across individuals even when risk is same - ANS Uncertainty
can differ across individuals even when risk is same
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Information (does/does not) alter risk (objective) but can alter uncertainty - ANS Information
does not alter risk (objective) but can alter uncertainty
Reduction in certainty (can/cannot) be a good thing - ANS Reduction in certainty can be a
good thing
CATEGORIES OF RISK - ANS 1. Pure v. Speculative
2. Static v. Dynamic
3. Fundamental v. Particular
4. Core v. Secondary
SOURCES OF RISK - ANS 1. Personal Risk
2. Property Risk
3. Liability Risks
4. Financial Risks
Exposure - ANS person or property facing risk or loss
peril - ANS immediate cause of loss
hazard - ANS condition affecting the perils (frequency or severity of loss)
physical hazards - ANS property conditions
moral hazard - ANS behavioral changes
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, morale hazard - ANS indifference
societal hazards - ANS legal or cultural
risk neutral - ANS indifferent toward risk, value of risky situation is expected loss
risk averse - ANS prefer to avoid risk, willing to pay more than expected loss to avoid risk
risk seeker - ANS prefer risk, would pay more than expected return to engage in risky
situation
BURDEN OF RISK ON SOCIETY - ANS 1. need for larger emergency funds
2. loss os needed goods and services
3. fear and worry
risk management - ANS scientific approach to dealing with risk
RISK MANAGEMENT PROCESS - ANS 1. Determination of objectives
2. Identification of risks
3. evaluation of risks
4. consideration of alternatives-selection of the tool
5. implementing the decision
6. Evaluation and review
POST LOSS OBJECTIVES - ANS Survival, continuity of operations, earnings stability, continued
growth, social responsibility
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
CORRECT ANSWERS LATEST VERSION
2025/2026.
Risk - ANS Uncertainty regarding loss
Danger (does/does not) equate risk - ANS Danger does not equal risk
risk is measured by: - ANS 1. frequency/likelihood
2. Severity/impact
3. Expected value/loss
4. Risk Profile
Relative variation of actual from expected loss measured by: - ANS Variation or Standard
Deviation
Uncertainty - ANS doubt about our ability to predict future outcomes
Uncertainty (can/cannot) differ across individuals even when risk is same - ANS Uncertainty
can differ across individuals even when risk is same
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Information (does/does not) alter risk (objective) but can alter uncertainty - ANS Information
does not alter risk (objective) but can alter uncertainty
Reduction in certainty (can/cannot) be a good thing - ANS Reduction in certainty can be a
good thing
CATEGORIES OF RISK - ANS 1. Pure v. Speculative
2. Static v. Dynamic
3. Fundamental v. Particular
4. Core v. Secondary
SOURCES OF RISK - ANS 1. Personal Risk
2. Property Risk
3. Liability Risks
4. Financial Risks
Exposure - ANS person or property facing risk or loss
peril - ANS immediate cause of loss
hazard - ANS condition affecting the perils (frequency or severity of loss)
physical hazards - ANS property conditions
moral hazard - ANS behavioral changes
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, morale hazard - ANS indifference
societal hazards - ANS legal or cultural
risk neutral - ANS indifferent toward risk, value of risky situation is expected loss
risk averse - ANS prefer to avoid risk, willing to pay more than expected loss to avoid risk
risk seeker - ANS prefer risk, would pay more than expected return to engage in risky
situation
BURDEN OF RISK ON SOCIETY - ANS 1. need for larger emergency funds
2. loss os needed goods and services
3. fear and worry
risk management - ANS scientific approach to dealing with risk
RISK MANAGEMENT PROCESS - ANS 1. Determination of objectives
2. Identification of risks
3. evaluation of risks
4. consideration of alternatives-selection of the tool
5. implementing the decision
6. Evaluation and review
POST LOSS OBJECTIVES - ANS Survival, continuity of operations, earnings stability, continued
growth, social responsibility
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
