RMI 2301 Study Guide - Fall 2019, Comprehensive Midterm Notes - Retail Loss Prevention, Moral Hazard, Vehicle Insurance
14 Feb 2019
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Risk management lecture one notes: the problem of risk. Uncertainty concerning the occurrence of a loss: examples, skydiving, building a new home, stock investment, buying an old gas station. A condition in which there is a possibility of an adverse deviation from a desired outcome that is expected or hoped for. A state of mind characterized by doubt. Chance of loss: the probability that an event that causes a loss will occur. Objective probability: measurable, predictable outcomes (at infinity) Subjective probability: an individual"s personal prediction for an outcome. Hazard: a condition that creates or increases the chance of a loss. Physical hazard: a physical condition that increases the chance of a loss: slippery road, smoking in bed, texting while driving. Legal hazard: characteristics of the legal or regulatory system that increases the frequency or severity of loss: environmental cleanup, swimming pools.
