Unit 5 Planning: Pricing and Risk Management

The technique of assessing, minimizing, and preventing

accidental loss to a business, as through the use of insurance, safety measures, etc.

• Accidental loss insurance

• Risk management

• 
  Auto insurance

• Business management

The more unusual a product is perceived to be by consumers, the greater the freedom to set higher prices.

• True

• False

Insurance companies provide us with that intangible security against financial loss, should we face injury, illness, damage of property, or even death.

• True

• False

The total amount and type of insurance carried.

• Claim

• Deductible

• Coverage

• Insurance

A specified amount of money that the insured must pay before an insurance company will pay a claim.

• Premium

• Deductible

• Liability

• Claim

Risk transference nearly always involves:

• Payment of a risk premium to the party taking on the risk.

• Accepting a lower profit if some activities overrun their budget.

• Eliminating risk through beta testing.

The term risk is used in business to refer to the

• possibility of loss or gain.

• mistakes that employees make.

• chances that consumers take.

• uncontrollable possibility of danger.

An earthquake is an example of a __________ risk.

• Hazard

• Competition

• Inflation

An example of an internal financial risk is

• foreign exchange rate changes.

• credit downgrades.

• consumer buying power.

• improper budgeting practices.

Having unreliable manufacturing equipment is an example of what type of risk?

• Operational

• Strategic

• Hazard

• Financial