1/7 Flashcards
“___” is used in situations where the probability of possible outcomes are known.
Risk
___ is used in situations where the probability of possible outcomes can’t be estimated.
Uncertainty
___ defines any situation or circumstance in which a loss is possible, regardless of whether a loss occurs.
Loss Exposure
___ risk is the relative variation of the actual loss from the expected loss. It can be defined by a statistic such as standard deviation.
Objective
___ risk is the uncertainty based on a person’s mental condition or state of mind.
Subjective
The ___ probability is the long-run relative frequency of an event based on the assumptions of an infinite number of observations and of no change in the underlying conditions.
Objective
___ probability is the individual’s personal estimate of the chance of loss.
subjective
___ is the cause of the loss.
peril
A(n) ___ is any condition that increase the chance of loss.
hazard
A(n) ___ hazard is a physical condition that increases the frequency or severity of a loss.
physical
A(n) ___ hazard refers to dishonesty or character defects in an individual that increase the frequency or severity of a loss.
moral
A(n) ___ hazard refers to carelessness or indifference to a loss, usually due to having insurance, increasing the frequency or severity of a loss.
Attitudinal
A(n) ___ hazard refers to the characteristics of the legal system or regulatory environment that increase the frequency or severity of losses.
legal
When there is a(n) ___, the only possibilities are loss or no loss. (earthquake)
pure risk
When there is a(n) ___, either profit or loss is possible. (gambling)
speculative risk
