To apply the rules of risk management,the risk manager must know all of the following except:
A)the exact amount of losses the firm is going to have in a certain period of time
B)how to identify the loss potential to which the firm is exposed
C)how to measure the loss potential to which the firm is exposed
D)how to measure the benefits and costs of alternative risk bearing devices for given situations

Question

Quizplus · Accepted Answer

Risk management involves identifying potential risks and determining how to manage those risks to minimize losses. However, it is impossible to know the exact amount of losses that a firm will experience in a certain period of time, as this will depend on many factors outside of the firm's control (such as natural disasters or changes in the economy). Therefore, the risk manager must focus on identifying and measuring the loss potential to which the firm is exposed and evaluating the benefits and costs of different risk management strategies.

To Apply the Rules of Risk Management,the Risk Manager Must