The worst loss that is likely to happen is referred to as the
A)maximum possible loss.
B)probable maximum loss.
C)frequency of loss.
D)severity of loss.

Question

Quizplus · Accepted Answer

The probable maximum loss refers to the worst loss that is expected to occur based on statistical analysis, past losses, and other relevant factors. It is important for insurance companies and risk managers to determine this value in order to appropriately price policies and plan for potential losses. The maximum possible loss refers to the absolute worst-case scenario, which may be theoretically possible but is extremely unlikely to occur. Therefore, B is the best choice as it is the closest option to the likely worst loss.

The Worst Loss That Is Likely to Happen Is Referred