Study sets matching "risk chapter 1"
Study sets
Diagrams
Classes
Users
Loss Exposure
Objective Risk
Subjective Risk
Chance of Loss
Any situation or circumstance in which a loss is possible, reg…
is defined as the relative variation of actual loss from expec…
is defined as uncertainty based on a person's mental condition…
The probability that an event will occur
Loss Exposure
Any situation or circumstance in which a loss is possible, reg…
Objective Risk
is defined as the relative variation of actual loss from expec…
Risk
Risk Management
Pure Risk
Speculative Risk
Uncertainty as to loss
the process used to systematically manage risk exposures
A risk that exists when there is uncertainty as to whether a l…
A risk that exists when there exists uncertainty about an even…
Risk
Uncertainty as to loss
Risk Management
the process used to systematically manage risk exposures
Risk definition
The two elements with in the definition…
possibility and probability
Most common types of risk
uncertaintiy of an outcome withe the possibilty of a negative…
uncertainty of an outcome... possibility of a negative out come
possiblity doesnt quantify risk;it only verfies that risk is p…
Pure and speculative risk... Subjective and objective... diversable…
Risk definition
uncertaintiy of an outcome withe the possibilty of a negative…
The two elements with in the definition…
uncertainty of an outcome... possibility of a negative out come
Risk
Risk is used...
Uncertainty is used...
loss exposure
uncertainty concerning the occurrence of a loss
where the probabilities of possible outcomes are known or can…
where such probabilities cannot be estimated
any situation in which a loss is possible, regardless of wheth…
Risk
uncertainty concerning the occurrence of a loss
Risk is used...
where the probabilities of possible outcomes are known or can…
Risk
Risk
Uncertainty
Loss Exposure
Uncertainty concerning the occurrence of a loss
The property or life that is being considered for insurance
Applies to situations where the probabilities of possible outc…
Any situation in which a loss is possible, regardless of wheth…
Risk
Uncertainty concerning the occurrence of a loss
Risk
The property or life that is being considered for insurance
Risk?
When to use the term risk, when to use…
Loss exposure?
Two broad types of risk?
Defined as uncertainty concerning the occurrence of a loss.
-Risk is used when the probability of a possible outcome CAN b…
Any situation in which a loss is possible, regardless of if th…
1. Objective risk... 2. Subjective risk
Risk?
Defined as uncertainty concerning the occurrence of a loss.
When to use the term risk, when to use…
-Risk is used when the probability of a possible outcome CAN b…
Enterprise RM
Risk (definition)
RM (definition)
Risk Profile
Considering all of the risks that an organization faces
Uncertainty concerning loss
The process of risk identification, risk analysis, selection a…
A set of characteristics common to all risks n a portfolio
Enterprise RM
Considering all of the risks that an organization faces
Risk (definition)
Uncertainty concerning loss
Risk
objective risk
subjective risk
chance of loss
uncertainty concerning future outcome
relative variance of actual outcome from expected outcome
individual's perception of a risk. risk can involve positive &…
probability that event will occur
Risk
uncertainty concerning future outcome
objective risk
relative variance of actual outcome from expected outcome
indirect losses
Driving at lower speeds in order to red…
Which one of the following method is a…
Examples of pure risk
lost profits from the interruption of the business
loss control
reduced level of risk activity
-injury to workers... -damage to assets... -legal liability... -higher…
indirect losses
lost profits from the interruption of the business
Driving at lower speeds in order to red…
loss control
Pure Risk
Risk certainty
Probability of loss
Speculative Risk
Loss or no loss... -Random events (examples)-flood,fire,theft,sic…
If you know a loss will happen for certain, their is no risk b…
•chance/likelihood of a loss
Chance of loss, gain or no loss or gain... ex: gambling, investme…
Pure Risk
Loss or no loss... -Random events (examples)-flood,fire,theft,sic…
Risk certainty
If you know a loss will happen for certain, their is no risk b…
Risk
Uncertainty
Loss Exposure
Objective risk
Uncertainty concerning the occurrence of a loss
used in situations where such probabilities cannot be estimated
Any situation or circumstance in which a loss is possible, reg…
is defined as the relative variation of actual loss from expec…
Risk
Uncertainty concerning the occurrence of a loss
Uncertainty
used in situations where such probabilities cannot be estimated
The core of Risk Management is the ____…
KNOWN risks need
UNKNOWN risks need
A probability of an event happening 100…
known
contingency plans////////////////// IF WE KNOW THE RISKS, WE N…
reserves (time or money)
...
The core of Risk Management is the ____…
known
KNOWN risks need
contingency plans////////////////// IF WE KNOW THE RISKS, WE N…
Loss Exposure
Objective Risk
Subjective (Perceived) Risk
Chance of Loss
Any situation or circumstance in which a loss is possible, reg…
the relative variation of actual loss from expected loss
uncertainty based on a person's mental condition or state of m…
The probability that an event that causes loss will occur
Loss Exposure
Any situation or circumstance in which a loss is possible, reg…
Objective Risk
the relative variation of actual loss from expected loss
Risk Management was concerned with the…
Expected Loss
Variance
Uncertainty about outcome
Pure and accidental loss
The expected loss (value) to be paid by an insurer; the averag…
Variability around expected value. Stocks - technology stock i…
Starting new job, driving a car, buying a home on the coast
Risk Management was concerned with the…
Pure and accidental loss
Expected Loss
The expected loss (value) to be paid by an insurer; the averag…
risk
loss exposure
objective risk
subjective (perceived) risk
traditional: uncertainty concerning the occurrence of a loss... i…
any situation or circumstance in which a loss is possible, reg…
relative variation of actual loss from expected loss; can be s…
uncertainty based on a person's mental condition or state of m…
risk
traditional: uncertainty concerning the occurrence of a loss... i…
loss exposure
any situation or circumstance in which a loss is possible, reg…
two types of Islamic financial contracts
li-tijari contract
li-tabarru' contract
Universal complimentarity
li-tabarru' and li-tijari
the contract for the purpose of generating profit
contract that is made with the purpose of giving reward, aid o…
Every economic agent that is involved in a financial transacti…
two types of Islamic financial contracts
li-tabarru' and li-tijari
li-tijari contract
the contract for the purpose of generating profit
Risk
Loss exposure
Objective Risk
Law of large numbers
Uncertainty concerning the occurrence of a loss
Any situation or circumstance in which a loss is possible, reg…
Relative variation of actual loss from expected loss
As the number of exposure units increases, the more closely th…
Risk
Uncertainty concerning the occurrence of a loss
Loss exposure
Any situation or circumstance in which a loss is possible, reg…
risk
loss exposure
Objective Probability
Subjective Probability
uncertainty concerning the occurrence of a loss
any situation or circumstance in which a loss is possible, reg…
refers to the long-run relative frequency of an event based on…
is the individual's personal estimate of the chance of loss... (i…
risk
uncertainty concerning the occurrence of a loss
loss exposure
any situation or circumstance in which a loss is possible, reg…
Risk
Loss exposure
Objective risk
Law of large numbers
Uncertainty concerning the occurrence of a loss
Any situation or circumstance in which a loss is possible, reg…
Degree of risk; the relative variation of actual loss from exp…
States that as the number of exposure units increases, the mor…
Risk
Uncertainty concerning the occurrence of a loss
Loss exposure
Any situation or circumstance in which a loss is possible, reg…
Attitudinal hazard
Avoidance
Chance of loss
Consequential loss
Carelessness or indifference to a loss, which increases the fr…
A risk control technique in which a certain loss exposure is n…
The probability a loss will occur
Financial loss occuring as the consequence of some other loss…
Attitudinal hazard
Carelessness or indifference to a loss, which increases the fr…
Avoidance
A risk control technique in which a certain loss exposure is n…
Risk
Loss Exposure
Objective Risk
Subjective Risk
historically has been defined as uncertainty concerning the oc…
any situation or circumstance in which a loss is possible rega…
the relative variation of actual loss from expected loss
uncertainty based on an individual's mental condition or state…
Risk
historically has been defined as uncertainty concerning the oc…
Loss Exposure
any situation or circumstance in which a loss is possible rega…
Risk-reward tradeoff
Risk management helps to...
Risk
The focus of Tradition Risk Management…
when there is more risk, typically there is a higher reward; y…
avoid/prevent/manage negative outcomes of risk
uncertainty surrounding/about outcomes uncertainty about a los…
pure risk
Risk-reward tradeoff
when there is more risk, typically there is a higher reward; y…
Risk management helps to...
avoid/prevent/manage negative outcomes of risk
Probability
Pure Risk
Speculative Risk
Credit Risk
The likelihood that an outcome or event will occur.
A chance of loss or no loss, but no chance of gain.
A chance of loss, no loss, or gain.
The risk that customers or other creditors will fail to make p…
Probability
The likelihood that an outcome or event will occur.
Pure Risk
A chance of loss or no loss, but no chance of gain.
Risk
Risk Management
Hazard Risk
Risk Profile
Uncertainty about an outcome that can be either negative or po…
The process of making and implementing decisions that enable a…
Risk from accidental loss, including the possibility of loss o…
A set of characteristics common to all risks in a portfolio
Risk
Uncertainty about an outcome that can be either negative or po…
Risk Management
The process of making and implementing decisions that enable a…
define risk
3 steps to managing risk
subjective risk
high vs low... subjective risk
uncertainty concerning a loss.... primary danger is the ignoranc…
1. identify... 2. loss control... 3. financing
individual perception
high = conservative... low = risky
define risk
uncertainty concerning a loss.... primary danger is the ignoranc…
3 steps to managing risk
1. identify... 2. loss control... 3. financing