Chapter 08 student

Chapter 08 student - Chapter Objectives Give examples of...

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Chapter Objectives  Give examples of when risk avoidance might be a wise risk  management decision  Describe how loss control is used as a complement to risk retention  and risk transfer  Explain the concept of present value and its relevance for risk  management decision making  Explain the relationship of expected loss frequency and severity to  the optimal use of risk retention  Discuss the use of statistical analysis in the selection of deductible  levels  Describe several characteristics of firms that may find self insurance  to be a feasible risk management alternative  Explain the major considerations in implementing risk management  decisions  Describe the concept of enterprise risk management and some of  the alternative risk transfer tools that firms use in this framework 1
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Risk Management Process  Identify risks  Evaluate risks  Select risk management techniques  Implement and review decisions  2
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Introduction  The selection of appropriate risk  management techniques is a __________  problem  3
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Introduction The steps for selecting among available  risk management techniques for a given  situation may be summarized as follows  Avoid risks if possible  Implement appropriate loss control measures  Select the optimal mix of risk retention and  risk transfer  4
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Avoid Risks if Possible  Risks that can be eliminated without an  adverse effect on the goals of an individual  or business probably should be avoided  Without a systematic identification of pure  risk exposures, some risks that easily  could be avoided may inadvertently be  retained  5
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Implement Appropriate Loss Control  Measures  For risks that a business or individual cannot or does not  wish to ________, consideration should be given to 
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This note was uploaded on 06/25/2011 for the course FINA 341 taught by Professor Thompson during the Spring '11 term at South Carolina.

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Chapter 08 student - Chapter Objectives Give examples of...

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