Loss frequency describes which of the following Which of the following is NOT a method of categorizing risk Risks affecting a large portion of the population at a given time are which of the following Which of the following is NOT a type of funded retention Number of losses Certain vs Uncertain Fundamental risks Why should we measure loss severity Which of the following is the last step in the risk management process but often done first Hazards may be categorized by which of the following groups Karen won t allow any of the neighborhood children into her yard because she has a large swimming pool and doesn t want anyone to fall in resulting in her being responsible for the harm of a child What type of risk is Karen trying to avoid Risk prevention and risk reduction are both included under which of the following As the Chief Investment Officer for A Nyce Place to Work you have been given the opportunity to invest in the Super Tazer It is a tazer that when you push the button incapacitates everyone in a 10 foot radius of you You have figured out that there are three potential outcomes for this investment Outcome Probability Return 1 25 10 2 50 25 3 25 40 What is the expected return on the investment Make sure your answer is in a decimal format 10 55 etc not a percentage 50 Round if necessary to the hundreths position i e 089 09 According to Innovation Risk How to reserves self insurance captives all of the above are examples of funded retention Risk classification and determination of transfer insurance amount Review and Evaluate Tangible physical and Intangible Liability Risk loss control 0 25 25 10 5 25 25 40 25 determine which risks are being faced 1 The Dow Jones Industrial Average Who is using the model Risk reduction has both monetary and non monetary costs Erin just paid ADT to install an alarm system in her house Now she can finally stop worrying about locking her doors at night Incomplete The number of days of life lost Putting a value on human life Make Smarter Decisions which of the following is NOT one of the five rules of thumb to minimizing risk According to Innovation Risk How to Make Smarter Decisions which of the following is NOT an observable external factor measured by the Black Scholes formula According to Innovation Risk How to Make Smarter Decisions the utility of a model depends on the model itself why it s being used and which of the following One of the core concepts of the reading A Scientific View of Risk is Think about the following statement Innovations to make us feel safer often lead to us changing our habits because we feel safer thereby increasing risk Which of the following is an example of the statement Greg and Emily were tasked with developing a model of how an individual may allocate risk Greg s model for determining appropriate allocation of risk neglected to consider one important factor the initial wealth of the individuals Emily s model incorporated all of the factors that Greg did AND included initial wealth and found very different results than Greg s model Which of the following describes Greg s model One of the examples used in A Scientific View of Risk is that 1 in 8 women will develop breast cancer This statistic is for women who live to be 95 years old This example measures the likelihood of developing cancer over an entire lifetime This ignores some information what information is ignored One of the public policy concerns associated with risk reduction in the reading A Scientific View of Risk is estimating the cost and benefits of risk reduction For many risks such as highway safety estimating the cost and benefits of risk reduction include 2 Human cognition A time element given period of time Forming an economic framework analysis It ignores other available information such as other possible events and their consequences Decisions under risk Maximin or Minimax Principle Conditional Maximax or Minimin Principle Rollback technique Decision theory Investment C expected value of 12 70 According to Innovation Risk How to Make Smarter Decisions mathematical modeling is more precise than which of the following The reading A Scientific View of Risk has a different definition of risk than we have used in class The definition used in this reading added what component to the definition Which of the following is not a step in decision theory What is one weakness of the maximum likelihood principle The decision situations wherein the decision maker chooses to consider several possible outcomes and the probabilities of their occurrence can be stated are called This principle is adopted by pessimistic decision makers who are most conservative in their approach A pay off is a n value in the sense that associated with each course of action is a certain profit loss The principle of decision making stipulates that a decision maker s view is usually extreme optimism What is the name for a solution that is obtained by working backwards from right to left through a decision tree Which of the following determines optimal strategies when a decision maker is faced with several different alternatives and a risky pattern of future events Google Inc has three potential investment opportunities following the release of their driverless car prototype Which of the following should they pursue Investment A Probability Outcome 55 20 20 10 25 5 3 Investment B Probability Outcome 60 15 30 12 10 10 Investment C Probability Outcome 50 20 28 12 22 3 The World Phone Inc currently has 100 000 to invest in new technology for the firm There are three possible technologies the firm can invest in Which of the following should The World Phone pursue Investment A Probability Outcome 40 15 35 10 25 7 5 Investment B Probability Outcome 60 10 30 20 10 5 Investment C Probability Outcome 50 15 20 10 30 5 According to Thinking Like an Economist economists increasingly believe that the key to progress in macroeconomics lies in According to Thinking Like an Economist when does the invisible hand mechanism break down Utility functions are normally a function of The increase in total benefit that results from carrying out one additional unit of an Investment B has an expected value of 11 5 More careful analysis of the individual markets that make up broader aggregates When costs of benefits accrue to people other than the decision maker Wealth Marginal benefit 4 activity is the According to Thinking Like An Economist what is the difference between a normative and a positive question
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