1. If an insurance company invests in the stock market, what type of instrument would the insurer use to mitigate the risk of stock price fluctuations?
2. What is a variable life insurance policy
3.Utility theory is a preference-based approach that provides a rank ordering of choices. Explain this statement.
4. A study of data losses incurred by companies due to hackers penetrating the internet security of the firm found that 60% of the firms in the industry studied had experienced security breaches and that the average loss per security breach was $15,000. What is the probability that a firm will not have a security breach?
5.What was the cause of AIG’s past problems? Explain in the context of assets and liabilities.
6. Hurricane Iniki in 1992 caused extensive damage to one of the Hawaiian Islands. A significant loss in tourist activity resulted. Assume the Kooey Hotel experienced $500,000 in damage to its property. Furthermore, assume Kooey typically brought in $100,000 of revenue per month, on which it incurred $80,000 of fixed and variable expenses. For two months following Iniki, the Kooey Hotel was shut down, but still incurred expenses of $50,000. The hotel spent $15,000 more than usual on advertising before reopening. Based on this information, what would be the insurable consequential losses of the Kooey Hotel from Hurricane Iniki? What can be done to reduce those losses?
7. What are risk-based capital requirements, and what is their purpose?
8. What are the various types of insurance companies?
9. A physician or surgeon may become liable for damages on the basis of contract or negligence. Why is the latter more common than the former? What does your answer to this question tell you about managing your liability risks?
10. What is the relationship between uncertainty and risk?
11.Define the terms loss prevention and loss reduction. Provide examples of each.
12. Lorenzo, a construction worker, was hit by a car while working alongside a busy highway. His average weekly wage before the accident was $500. The state he lives in provides workers’ compensation benefits at a replacement ratio of 66.7 percent, with a maximum benefit of $400 a week. If Lorenzo is temporarily and totally disabled for twelve weeks, how much compensation can he expect to receive?
13. How does e-risk fit into the categories of risk?
