7 - Personal Risk Management Flashcards
1
Q
Definition of pure risk
A
Possibly of loss or no loss.
Ie. premature death
2
Q
Definition of speculative risk
A
Possibly loss or gain
Equity investment risk
3
Q
Objective risk
A
One that most people agree is a risk
Especially experts
4
Q
Subjective risk
A
May be perceived as risk to some and not others
5
Q
Standard deviation
A
Measures risks. Fluctuations around a central tendency
6
Q
Axes of efficient frontier
A
Y is expected return
X is risk
7
Q
5 steps of risk management
A
Identify
Evaluate
Control. Ie. fire extinguisher
Cover and insure
Monitor and revise plan
