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15 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Pure Risk |
Loss, no loss, no gain. |
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Speculative Risk |
Loss, no loss, gain. |
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Static |
Does not change over time, always present. |
Weather, death, human behavior. |
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Dynamic |
Arises out of circumstances over time. |
Terrorism, cyber attacks, nuclear. |
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Subjective Risk |
An individuals new of uncertainty or the situation involving risks. (Depends on individual). |
Opinionated |
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Objective Risks |
Risk is uncertainty concerning a loss. |
Based on real data. |
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Sources of pure Risk |
Human capital- ability to generate income. Retirment/unemployment- loss or reduction of income. Property/liability- ownership of financial or physical assets. Wealth- legal fees |
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Factors affecting risk |
Peril - immediate cause of loss Frequency of loss - how often does it occur? Severity of loss- how bad is the damage money wise? |
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Hazard |
Underlying condition lying behind a loss occurrence. |
Increase severity and frequency of loss. |
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Physical hazard |
Location- if peril is flood, living at the shore. Construction- fire, if the structure is made from wood. Use- university classroom vs church. |
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Moral hazard |
Act differently because if existence of insurance. |
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Morale hazard |
Carelessness concerning losses. Nothing to do with insurance . |
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Diverisfiable |
Impacts some individuals, business groups. |
Fire |
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Undiversifiable |
Impacts large amount of society. |
Natural disaster |
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Financial consequences |
1) expected cost of loss 2) cost to manage risk 3) residual uncertainty |
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