In the context of ERM, hazard risk is defined as:
A) being associated with the strategic direction of a firm
B) being associated with the operations of a firm
C) adverse financial losses associated with diversifiable risks.
D) adverse financial losses associated with pure risks.

Question

Quizplus · Accepted Answer

Hazard risks are a type of pure risk, which refers to the potential for adverse financial losses due to events such as natural disasters, accidents, and other unforeseen events. These risks are not associated with the strategic direction or operations of a firm and cannot be diversifiable. Therefore, option D is the most appropriate choice.

In the Context of ERM, Hazard Risk Is Defined As