FIN 428 Week 1 Short Answer Assignment

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Week 1 Short Answer Assignment

Complete the questions below in two to four sentences.

1. Define risk. In your definition, state the relationship between risk and uncertainty.

2. Risk may be classified in several ways. List the principal ways in which risk may be categorized, and explain the distinguishing characteristics of each class.

3. List the four types of pure risk facing an individual or an organization and give an example of each.

4. Explain why the number of risks and the severity of losses increase over time.

5. Identify the two broad approaches to dealing with risk recognized by modern risk management theory.

6. Identify and briefly describe the six steps in the risk management process.

7. What is the relationship between risk management and insurance management? In your answer, you should demonstrate an understanding of the difference between the two fields.

8. Distinguish among traditional risk management, financial risk management, and enterprise risk management.

9. List and explain each of the desirable elements of an insurable risk.

10. Explain the dual application of the law of large numbers as it pertains to the operation of insurance.