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According to the American Academy of Actuaries, how is risk distinguished from uncertainty?
According to the American Academy of Actuaries, how is risk distinguished from uncertainty?
- Risk and uncertainty both involve unknown or unestimated probabilities.
- Risk and uncertainty both involve known or estimated probabilities.
- Risk involves known or estimated probabilities, while uncertainty involves unknown or unestimated probabilities. (correct)
- Risk involves unknown or unestimated probabilities, while uncertainty involves known or estimated probabilities.
What is loss exposure used for, according to corporate risk managers?
What is loss exposure used for, according to corporate risk managers?
- Avoiding potential losses
- Estimating uncertainties
- Managing acceptable risks
- Identifying potential losses (correct)
Which type of risk involves situations where the probabilities of possible outcomes are known or can be estimated with some degree of accuracy?
Which type of risk involves situations where the probabilities of possible outcomes are known or can be estimated with some degree of accuracy?
- Pure Risk (correct)
- Diversifiable Risk
- Speculative Risk
- Nondiversifiable Risk
What is the term used for situations where the probabilities cannot be estimated?
What is the term used for situations where the probabilities cannot be estimated?
How does the text define risk?
How does the text define risk?
What is the term used to describe the uncertainty concerning the occurrence of a loss?
What is the term used to describe the uncertainty concerning the occurrence of a loss?
In which type of risk are the probabilities of possible outcomes known or can be estimated with some degree of accuracy?
In which type of risk are the probabilities of possible outcomes known or can be estimated with some degree of accuracy?
What term is used to identify potential losses by corporate risk managers?
What term is used to identify potential losses by corporate risk managers?
According to the American Academy of Actuaries, which term is used in situations where such probabilities cannot be estimated?
According to the American Academy of Actuaries, which term is used in situations where such probabilities cannot be estimated?
What do we call risk that involves situations where the probabilities of possible outcomes can be estimated with some degree of accuracy?
What do we call risk that involves situations where the probabilities of possible outcomes can be estimated with some degree of accuracy?
What is the essence of insurance based on the given text?
What is the essence of insurance based on the given text?
What is substituted for actual loss in the process of pooling?
What is substituted for actual loss in the process of pooling?
What is typically included in an insurance plan or arrangement based on the provided definition?
What is typically included in an insurance plan or arrangement based on the provided definition?
Which characteristic is specifically excluded by most insurance policies based on the text?
Which characteristic is specifically excluded by most insurance policies based on the text?
What does the text identify as the social benefits of insurance?
What does the text identify as the social benefits of insurance?
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