Managing Financial Risk Flashcards
1
Q
Name the different methods of dealing with financial risk
A
- Risk Acceptance
- Risk Reduction
- Risk Avoidance
- Risk Transfer
2
Q
What are the advantages and disadvantages of self-insurance
A
A:
- significantly cheaper
- The savings made remain your money
D:
- any loss occuring is covered only to the extent of the current value of your savings / investment
3
Q
Name the different categories of insurance
A
- Indemnity insurance
- Non-indemnity insurance
4
Q
Why is the insurance contract often refered to as a contract of good faith ?
A
The insured is obligaited to disclose all the material facts to the insurer
