Untitled Deck

Question 1

What is Risk Management?

Answer 1

Risk Management is the process of making and carrying out decisions that will minimize the adverse effects of accidental losses upon an organization.

Reference 6-1

Question 2

What is Loss Exposure?

Answer 2

Loss Exposure is the chance of a financial loss to an organization as a result of a particular peril striking a thing of value.

Reference 6-3

Question 3

What is Tangible Property?

Answer 3

Tangible Property is property that is real, can be touched, and has form and substance.

Reference 6-3

Question 4

What is Going Concern Value?

Answer 4

Going Concern Value is the difference in the value of property which must be sold after a loss and its value had the business continued.

Reference 6-4

Question 5

What is Intangible Property?

Answer 5

Intangible Property is property that has no physical substance and consists of legal rights rather than things.

Reference 6-4

Question 6

What are Expediting Costs?

Answer 6

Expediting Costs are the extra costs incurred in hastening the recovery of a business after a loss.

Reference 6-7

Question 7

What is Risk Control?

Answer 7

Risk Control refers to the steps taken to reduce the frequency and severity of losses as much as possible with the resources that are available.

Reference 6-16/17

Question 8

What is Risk Financing?

Answer 8

Risk Financing is concerned with paying those losses that inevitably occur.

Reference 6-20

Question 9

What is Segregation in risk management?

Answer 9

Segregation involves arranging an organization’s activities and resources so that no single event can cause simultaneous losses to all of them.

Reference 6-18

Question 10

What is Separation in risk management?

Answer 10

Separation involves dividing an organization’s single asset or operation into two or more separate units.

Reference 6-18

Question 11

What is Duplication in risk management?

Answer 11

Duplication involves complete reproduction of an organization’s own ‘standby’ asset or facility to be kept in reserve.

Reference 6-19

Question 12

What is Retention in risk management?

Answer 12

Retention includes all means of generating funds from within the business to pay for losses.

Reference 6-20

Question 13

What is Contractual Transfer?

Answer 13

Contractual Transfer includes all means of generating funds from outside the business to pay for losses.