Risk Management Flashcard

Front

Identifying potential business risks and attempting to avert them is known as _________________.

Back

Risk Management

Front

Situations that cannot be avoided, but can be minimized by purchasing insurance or creating a risk management plan are known as _________________.

Back

Controllable Risks, Controllable Risk

Front

Situations that cannot be predicted or covered by purchasing insurance are known as ___________________.

Back

Uncontrollable Risks, Uncontrollable Risk

Front

____________________ is caused by acts of nature. This is a controllable risk and insurance can help recover from losses (flood, fire, storm, freeze, drought).

Back

Natural Risk

Front

__________________ occurs when business activities suffer due to changes in the US or world economy. Local, national, and world economic and political conditions can affect the success of a business; it is very hard to predict and is, therefore, uncontrollable.

Back

Economic Risk

Front

_________________ is the potential that the target market for new goods and services is much less than originally projected. This is an uncontrollable risk.

Back

Market Risk

Front

____________________ is a negative situation caused by the actions of people (shoplifting, embezzlement, and use of stolen credit cards). This includes risk caused by employees such as fraudulent behavior. Some of these risks are controllable and insurable.

Back

Human Risk

Front

_________________ is a risk with a possibility of loss, but no possibility of gain. Insurance protection is necessary to cover these losses.

Back

Pure Risk

Front

____________________ is a risk that can result in either financial gain or financial loss. Most of these risks are not insurable because they are choices or risks taken to make a profit.

Back

Speculative Risk