PBMF 14.1 Understanding Risk

_____ is the possibility of loss, damage, or injury.

Insurance is a ​ (a)   service used to protect against ​ (b)   .

• financial
• loss
• business
• gain

The potential that the target market for new goods or services is much less than originally projected.

• natural risk

• market risk

• economic risk

• human risk

A ​ (a)   risk is a situation caused by acts of nature.

• natural
• market
• economic
• human

Risk management is the process of ​ (a)   risk and finding ways to ​ (b)   or manage ​ (c)   .​

• evaluating
• minimize
• loss
• maximize
• ignoring
• exaggerating

Which of the following is NOT one of the four basic types of risk?

• Natural

• Economic

• Market

• Controllable

​ (a)   risks are situations that cannot be avoided, but can be minimized by purchasing insurance or creating a risk management plan.

• Controllable
• Economic
• Uncontrollable
• Market

Match each type of risk with the correct description.

• economic risk

• situation that occurs when business activities suffer due to changes in the economy

• natural risk

• situation caused by acts of nature

• human risk

• negative situation caused by the actions of people

• market risk

• target market for new goods or services is much less than projected

Which of the following is one of the basic ways to manage risk?

• avoidance

• assumption

• adherence

• reliance

A pure risk is a risk with a possibility of ​ (a)   , but ​ (b)   possibility of gain.

• loss
• no
• injury
• profit
• damage
• high