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Questions and Answers
What is the primary reason consumers choose to purchase insurance, even when its cost exceeds potential losses?
What is the primary reason consumers choose to purchase insurance, even when its cost exceeds potential losses?
Which principle do insurance markets primarily utilize to manage and absorb risks?
Which principle do insurance markets primarily utilize to manage and absorb risks?
How should risks be classified for organizations to manage them more effectively?
How should risks be classified for organizations to manage them more effectively?
What is the main distinction between systematic and systemic risks?
What is the main distinction between systematic and systemic risks?
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What role does the state play in risk management during market failures?
What role does the state play in risk management during market failures?
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What largely influences an individual's perception and reaction to risk?
What largely influences an individual's perception and reaction to risk?
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What is considered a public good based on the characteristics provided?
What is considered a public good based on the characteristics provided?
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In the context of market failure, which scenario would warrant government intervention?
In the context of market failure, which scenario would warrant government intervention?
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Which of the following best describes a merit good?
Which of the following best describes a merit good?
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What is a primary risk that could potentially cause the collapse of an insurance company?
What is a primary risk that could potentially cause the collapse of an insurance company?
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How can the deficit in an insurance company be managed?
How can the deficit in an insurance company be managed?
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Which factor can notably change an individual's attitude to risk?
Which factor can notably change an individual's attitude to risk?
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What describes the situation when the private sector fails to provide a necessary good?
What describes the situation when the private sector fails to provide a necessary good?
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Which of the following is NOT a characteristic of public goods?
Which of the following is NOT a characteristic of public goods?
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What is a common outcome of high competition in the insurance industry?
What is a common outcome of high competition in the insurance industry?
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What is the primary purpose of the insurance regulator prescribing a minimum amount of funds?
What is the primary purpose of the insurance regulator prescribing a minimum amount of funds?
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How is the commercial premium calculated in relation to the pure premium?
How is the commercial premium calculated in relation to the pure premium?
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What statistical method do insurers use to quantify acceptable risk?
What statistical method do insurers use to quantify acceptable risk?
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What concept explains the reduction of risk by increasing predictability of average losses among a large number of exposures?
What concept explains the reduction of risk by increasing predictability of average losses among a large number of exposures?
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Why do insured individuals often pay premiums exceeding their own potential losses?
Why do insured individuals often pay premiums exceeding their own potential losses?
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To maintain viability, what must insurers ensure regarding commercial premiums?
To maintain viability, what must insurers ensure regarding commercial premiums?
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What two types of assessment contribute to understanding risk in insurance markets?
What two types of assessment contribute to understanding risk in insurance markets?
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In the context of insurance, what does the term 'utility' refer to?
In the context of insurance, what does the term 'utility' refer to?
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What does the maximin decision criterion emphasize when making decisions regarding insurance?
What does the maximin decision criterion emphasize when making decisions regarding insurance?
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In the maximin decision-making framework, how are probabilities treated?
In the maximin decision-making framework, how are probabilities treated?
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Which scenario is considered worse under the maximin decision criterion?
Which scenario is considered worse under the maximin decision criterion?
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Which of the following reflects the rationale for purchasing insurance under the maximin strategy?
Which of the following reflects the rationale for purchasing insurance under the maximin strategy?
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What is a primary reason organizations manage risks?
What is a primary reason organizations manage risks?
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What observation has been made regarding the decline of insurance in risk management?
What observation has been made regarding the decline of insurance in risk management?
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What is a key disadvantage of choosing a high deductible in an insurance policy?
What is a key disadvantage of choosing a high deductible in an insurance policy?
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What does a good risk-to-return trade-off indicate for an organization?
What does a good risk-to-return trade-off indicate for an organization?
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When evaluating risk control measures, what aspect should be considered according to the maximin strategy?
When evaluating risk control measures, what aspect should be considered according to the maximin strategy?
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In a scenario where a fire is the pessimistic outcome, what does the utility curve illustrate?
In a scenario where a fire is the pessimistic outcome, what does the utility curve illustrate?
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Which of the following is NOT a criterion in minimizing risk according to effective risk management?
Which of the following is NOT a criterion in minimizing risk according to effective risk management?
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What is typically the result when insurance is chosen without a deductible under maximin principles?
What is typically the result when insurance is chosen without a deductible under maximin principles?
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Risk aversion in individuals suggests what behavior towards existing wealth?
Risk aversion in individuals suggests what behavior towards existing wealth?
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What does the cost of premiums being higher than expected losses imply in the context of insurance?
What does the cost of premiums being higher than expected losses imply in the context of insurance?
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In integrating risk control and financing, what is critical for companies to understand?
In integrating risk control and financing, what is critical for companies to understand?
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What typically happens when a firm disregards long-term risk reduction interventions?
What typically happens when a firm disregards long-term risk reduction interventions?
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Which of the following best describes the concept of utility in the context of insurance decision-making?
Which of the following best describes the concept of utility in the context of insurance decision-making?
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In the context of corporate governance, what is emphasized about risk profiles?
In the context of corporate governance, what is emphasized about risk profiles?
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What common misconception about risk and insurance is indicated?
What common misconception about risk and insurance is indicated?
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What aspect is essential for the effectiveness of risk reduction measures?
What aspect is essential for the effectiveness of risk reduction measures?
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Study Notes
Introduction
- This study guide covers Risk Assessment Models and Methodologies for a Bachelor of Commerce in Business Management degree.
- Copyright © EDUCOR, 2019. All rights reserved.
- All reproduction or distribution without prior written permission is prohibited.
Table of Contents
- The guide outlines topics to be covered like teaching methodology, module information, planning studies, and module content.
- Specific study units are listed for principles of management applied to managing risk, concepts of risk, decision-making under risk and uncertainty, risk identification, and risk evaluation, risk response, risk financing, and risk retention.
- Study tips and learning activities are included in the table of contents.
About the Brand
- Damelin provides education and support for students pursuing their career dreams.
- The institution has a 70+ year history of academic success and over 500,000 graduates.
- Damelin offers a Higher Education and Training (HET) qualification.
Teaching & Learning Methodology
- Damelin approaches teaching as a learning-centred and knowledge-based environment.
- Outcomes-oriented and learning-based outcomes are emphasized.
- Learning activities focus on active engagement and deep learning through tasks, integration, and application of knowledge.
- A collaborative pedagogy involving students and all sections of the institution is promoted, to achieve a broader perspective.
Additional Information
- Case study/Caselet: Apply learned concepts to presented case studies.
- Example: Work through examples to practice calculations and activities.
- Practice: Practice learned skills and concepts through exercises.
- Reading: Read assigned sections of the prescribed textbook.
- Revision: Complete compulsory revision questions.
- Self-check: Complete self-check activities to monitor progress.
- Study group/Discussion: Engage in discussions with study groups or online forums.
- Think point: Engage in reflective analysis and discussion of ideas.
- Video/Audio: Access and consume relevant video or audio content.
Module Information
- Qualification: Bachelor of Commerce in Business Management
- Module Title: Risk Assessment Models and Methodologies
- NQF Level: 7
- Credits: 15
- Notional Hours: 150
Module Purpose
- The module aims to develop student knowledge and skills in risk assessment to support effective risk management in business.
Module Outcomes
- Investigate key risk assessment principles for risk management strategy.
- Assess business needs to define risk assessment scope, impact, and probability.
- Investigate risk management models (and their future developments).
- Apply top-down risk assessment to define risk scope.
- Develop risk response strategies in relation to analysis to maximize positive outcomes.
- Identify and describe possible risk situations in an organization to maximize positive outcomes.
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Description
Explore the fundamental concepts of insurance and risk management in this quiz. Discover why consumers opt for insurance despite high costs, the principles that guide insurance markets, and the classification of risks for effective management. Learn about the state's involvement during market failures and differentiate between systematic and systemic risks.
