Understanding Risk: Terminology and Types

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What is the term for a physical condition that increases the chance of loss?

A Priori

Moral

Hazard (correct)

Empirical

Which type of probability is determined on the basis of historical data?

Rare Probability

A Priori Probability

Empirical Probability (correct)

Judgmental Probability

What type of risk affects the entire risk economy or a large number of persons/groups within the economy?

Pure risk

Particular risk

Financial risk

Fundamental risk (correct)

Which category of risks includes the risk of premature death, old age, poor health, and unemployment?

Personal Risks Signup and view all the answers

What is the term for a possibility of loss or no loss, where the outcome cannot be measured by monetary terms?

Pure risk Signup and view all the answers

Which of the following best defines the concept of risk?

Possibility of risk adverse deviation from a desired outcome Signup and view all the answers

What distinguishes risk from chance?

Risk implies uncertainty and the possibility of adverse deviation, while chance implies uncertainty with favorable outcomes Signup and view all the answers

Which term refers to an unpredictable combination of hazard that may lead to loss?

Peril Signup and view all the answers

What is the definition of pure risk?

A risk involving only the possibility of financial loss or no loss Signup and view all the answers

How is risk related to uncertainty?

Risk involves uncertainty about an event's outcome Signup and view all the answers

Understanding Risk: Terminology and Types

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Questions and Answers

What is the term for a physical condition that increases the chance of loss?

Which type of probability is determined on the basis of historical data?

What type of risk affects the entire risk economy or a large number of persons/groups within the economy?

Which category of risks includes the risk of premature death, old age, poor health, and unemployment?

What is the term for a possibility of loss or no loss, where the outcome cannot be measured by monetary terms?

Which of the following best defines the concept of risk?

What distinguishes risk from chance?

Which term refers to an unpredictable combination of hazard that may lead to loss?

What is the definition of pure risk?

How is risk related to uncertainty?

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