BANKING GENERAL KNOWLEDGE
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
The funds an insurance company sets aside to pay for reported but outstanding claims
|
|
|
Voluntary programs that are available from the government or private firms
|
|
|
The uncertainty concerning the occurrence of a financial loss
|
|
|
A course or principle of action adopted or proposed by an organization or individual.
|
Detailed explanation-1: -Risk is uncertainty of a financial loss. Thus, wherever there is uncertainty with respect to a probable loss there is risk. Insurance means securing the payment of a sum of money in the event of loss or damage (to property, life, a person etc.) by regular payment of premiums.
Detailed explanation-2: -Insurance risk is the threat of a future financial loss that an insurer is willing to share with an individual or entity facing that threat. Insurance spreads the risks of policyholders among those policyholders by incorporating the Law of Large Numbers.
Detailed explanation-3: -According to Knight, in the case of risk, the outcome is unknown, but the probability (objective probability) of that outcome is known. Conversely, uncertainty, is characterised by both an unknown outcome and an unknown probability (subjective probability).
Detailed explanation-4: -Risk is the uncertainty regarding the occurrence of financial loss. A peril is the actual cause of a loss and is specifically identified in the policy. A hazard is a situation or condition that may increase the possibility of a loss occurring.
Detailed explanation-5: -What is Risk? Definition of ‘risk’ in insurance is the “uncertainty of the occurrence of an event that can cause economic losses".