Study sets matching "risk chapter 1"
Study sets
Classes
Users
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…
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
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
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 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…
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
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…
Historic Definition of Risk
Loss Exposure
Objective Risk
Subjective Risk
The 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
uncertainty based on one's mental condition or state
Historic Definition of Risk
The uncertainty concerning the occurrence of a loss
Loss Exposure
Any situation or circumstance in which a loss is possible, reg…
Risk
Possibility
Probability
Pure Risk
When there is uncertainty about the type and or timing of outc…
Verifies that risk is present... Not measurable
The likelihood that an outcome or event will occur... Between 0 a…
Chance of a loss or no loss at all. No chance of gain... Traditio…
Risk
When there is uncertainty about the type and or timing of outc…
Possibility
Verifies that risk is present... Not measurable
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
definition of risk
uncertainty
degree of risk
peril
condition in which the possibility of an adverse deviation fro…
state of mind characterized by doubt, based on a lack of knowl…
likelihood of occurrence; law of large numbers
a cause of loss (fire, windstorm, hail, theft)
definition of risk
condition in which the possibility of an adverse deviation fro…
uncertainty
state of mind characterized by doubt, based on a lack of knowl…
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
risk
loss exposure
objective risk
subjective risk
uncertainty connecting the occurrence of a loss - one without…
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…
risk
uncertainty connecting the occurrence of a loss - one without…
loss exposure
any situation or circumstance in which a loss is possible, reg…
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
explain the Risk-reward trade off
what is risk
risk management helps to..
pure risk
it exists in business and it goes like this: more risk, more r…
uncertainty about an outcome
avoid/prevent/reduce (mitigate) the negative outcome of risk.
the focus of TRM. uncertainty regarding a loss or event which…
explain the Risk-reward trade off
it exists in business and it goes like this: more risk, more r…
what is risk
uncertainty about an outcome
Risk:
Peril:
Named Perils Insurance:
Hazard:
Possibility of an adverse deviation from a desired outcome tha…
Things like flood, fires, hurricanes
Only covers the stated specific things (ex: hurricane insuranc…
Increases a risk (increases odds of something happening)... -(ex:…
Risk:
Possibility of an adverse deviation from a desired outcome tha…
Peril:
Things like flood, fires, hurricanes
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
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
Loss Exposure
Objective Risk
Subjective Risk
uncertainty concerning the occurrence of loss
any situation or circumstance in which a loss is possible rega…
the relative variation of actual loss from expected loss.... How…
uncertainty based on a person's mental condition or state of m…
Risk
uncertainty concerning the occurrence of loss
Loss Exposure
any situation or circumstance in which a loss is possible rega…
Baseline risk
Business risk
Enterprise risk management
Event risk
Event risks that must be financed or insured with accordance w…
Risks that are associated with the cost of doing business, usu…
A management process that identifies, defines, quantifies, com…
The risk of loss without possibility of gain; risks that have…
Baseline risk
Event risks that must be financed or insured with accordance w…
Business risk
Risks that are associated with the cost of doing business, usu…
Two types of National Law
Two types of Domestic Law
Public
Private
Public & Private
Public & Private
Constitutional, Administrative (Tax), Procedural (Bankruptcy),…
Civil (Specialised: Commercial [Company law, Business contract…
Two types of National Law
Public & Private
Two types of Domestic Law
Public & Private
Risk
Pure risk
Speculative risk
Non-financial risk
The possibility of an unfortunate occurrence, the possibility…
The possibility of loss but not of gain, the best achievable o…
Aims to make a gain, but carries the possibility to break-even…
Anything of sentimental value is only insurable for its intrin…
Risk
The possibility of an unfortunate occurrence, the possibility…
Pure risk
The possibility of loss but not of gain, the best achievable o…
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