MKT 700 Study Guide - Quiz Guide: Risk Management Tools, Vehicle Insurance, Interest Rate Risk
Document Summary
Some ppl are risk takers, risk averse, and risk seeker. First principle: law of large numbers explains how insurers can figure out how much to charge different classes of insureds. Second principle: an insurance policy is a contract. The insurance industry holds 7. 5% of the assets of the 22 industries in. Canada while having some 14% of the operating profit margin. Exclusion if the insured has diabetes, a life insurance policy might be prepared to excluded complication arising from this disease. Premature death a smoker"s policy may be declined life insurance or will charge a higher premium to reflect the increase risk for early demise. Exogenous risk is one that we cannot control not affected by our actions: example: earthquake or a hurricane. Objective risk is risk that is based on experience of a population in a sample as a whole, where as subjective risk is based on a specific event or individual.
