RMI 300 UW madison exam 1

the likelihood than an outcome or event will occur
pure risk
a chance of loss or no loss, but no chance of gain
speculative risk
a chance of loss, no loss, or gain
credit risk
the risk that customers or other creditors will fail to make promised payments as they come due
subjective risk
the perceived amount of risk based on an individuals or organizations opinion
objective risk
the measurable variation in uncertain outcomes based on FACTS and DATA
Diversifiable risk
a risk that affects only some individuals, businesses or small groups
Nondiversifiable risk
a risk that affects a large segment of society at the same time
systemic risk
the potential for a major disruption in the function of an entire market or financial system
market risk
uncertainty about an investments future value because of potential changes in the market for that type of investment
Liquidity Risk
the risk that an asset cannot be sold on short notice without incurring a loss
a condition that increases the frequency or severity of a loss
moral hazard
a condition that increases the likelihood that a person will intentionally cause or exaggerate a loss
moral hazard (attitudinal hazard)
a condition of carelessness or indifference that increases the frequency or severity of loss
number of losses
the size of the loss
physical hazard
a tangible characteristic of property, persons, or operations that tends to increase the frequency or severity of loss
legal hazard
a condition of the legal environment that increases loss frequency or severity.
risk management
the process of making and implementing
cost of risk
the total cost incurred by an organization because of the possibility of accidental loss
risk appetite
the total exposed amount that an organization wishes to undertake on the basis of risk-return trade-offs for one or more desired an expected outcomes
six steps of the risk management process
1. identifying loss exposures

2. analyzing loss exposures

3. examining the feasibility of risk management techniques

4. selecting the appropriate risk management techniques

5. implementing the selected risk management techniques

6. monitoring results and revising the risk management program

pre-loss goals
goals to be accomplished before a loss, involving social responsibility, externally imposed goals, reduction of anxiety, and economy
post-loss goals
risk management program goals that should be in place in the event of a significant loss
risk management program
a system for planning, organizing, leading, and controlling the resources and activities that an organization needs to protect itself from the adverse effects of accidental losses
risk management process
the method of making, implementing, and monitoring decisions that minimize the adverse effects of risk on an organization
loss exposure
any condition or situation that presents a possibility of loss, whether or not an actual loss occrurs
balance sheet
the financial statement that reports the assets, liabilities, and owners’ equity of an organization as of a specific date
income statement
the financial statement that reports an organizations profit or loss for a specific period by comparing the revenues generated with the expenses incurred to produce those revenues
statement of cash flows
the financial statement that summarizes the cash effects of an organizations operating, inventing and financing activities during a specific period
hazard analysis
a method of analysis that identifies conditions that increase the frequency or severity of loss
property loss exposure
a condition that presents the possibility that a person or an organization wil sustain a loss resulting from damage (including destruction, taking or loss of use) to a property in which that person or organization has financial interest
tangible propoerty
property that has a physical form
real property
tangible property consisting of land, all structures permanently attached to the land, and whatever is growing on the land
personal property
all tangible or intangible property that is not real property
intangible property
property that has no physical form
liability loss exposure
any condition or situation that presents the possibility of a claim alleging legal responsibility of a person or business for injury or damage suffered by another party
personnel loss exposure
a condition that presents the possibility of loss caused by a person’s death, disability, retirement, or resignation that deprives an organization cannot readily replace
personal loss exposure
any condition or situation that presents the possibility of a financial loss to an individual or a family by such causes as death, sickness, injury, or unemployment
net income loss exposure
a condition that presents the possibility of loss caused by a reduction in net income
liability loss
any loss that a person or an organization sustains as a result of a claim or suit against that person or organization by someone seeking damages or some other remedy permitted by law
legal liability
the legally enforceable obligation of a person or an organization to pay a sum of money (called damages) to another person or organization
civil law
a classification of law that applies to legal matters not governed by criminal law and that protects rights and provides remedies for breaches of duties owed to others
criminal law
the branch of the law that imposes penalties for wrongs against society
a wrongful act or an omission, other than a crime or a breach of contract, that invades a legally protected right
the failure to exercise the degree of care that a reasonable person in a similar situation would exercise to avoid harming others
intentional tort
a tort committed by a person who foresees (or should be able to foresee) that his or her act will harm another person
strict liability
liability imposed by a court or by a statute in the absence of fault when harm results from activities or conditions that are extremely dangerous, unnatural, ultra hazardous, extraordinary, abnormal, or inappropriate
a legally enforceable agreement between two or more parties in which each party makes some promise to the other
breach of contract
the failure, without legal excuse, to fulfill a contractual promise
contractual liability
liability assumed through a hold-harmless agreement
a written law passed by a legislative body at either the federal or state level
workers compensation statute
a statute that obligates employers, regardless of fault, to pay specified medical, disability, rehabilitation, and death benefits for their employees job-related injuries and diseases
occupational disease
disease thought to be caused by work or the work environment
temporary partial disability
A disability caused by a work-related injury or disease that temporarily limits the extent to which a worker can perform job duties; the worker is eventually able to return to full duties and hours.
Temporary total disability
A disability caused by a work-related injury or disease that temporarily renders an injured worker unable to perform any job duties for a period of time.
Independent contractor
A person (or organization) hired to perform services without being subject to the hirer’s direction and control regarding work details.
Tagged In :

Get help with your homework

Haven't found the Essay You Want? Get your custom essay sample For Only $13.90/page

Sarah from studyhippoHi there, would you like to get such a paper? How about receiving a customized one?

Check it out