BBA Exam Cheatsheets

TU BBA 8th Semester

Complete BBA exam cheatsheets with formulas, key points & definitions — Financial Derivatives, Corporate Financing Decision & more specialization subjects

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Insurance and Risk Management

BNK 209

BBA 8th Semester · Banking & Finance Specialization · 3 Credit Hours · 48 LHs

Unit 1: Introduction to Risk

Risk: The uncertainty concerning the occurrence of a loss. It is the possibility that actual outcomes will differ from expected outcomes.

Peril: The cause of a loss (e.g., fire, flood, theft, death, earthquake).

Hazard: A condition that increases the likelihood or severity of a loss.

Types of Hazards

Type	Definition	Example
Physical Hazard	Physical condition that increases chance of loss	Icy roads, faulty wiring, defective brakes
Moral Hazard	Dishonesty or character defect that increases loss frequency	Arson for insurance money, faking injury
Morale Hazard	Carelessness or indifference because insurance exists	Not locking doors because contents are insured
Legal Hazard	Laws/regulations that increase loss frequency/severity	Consumer protection laws increasing liability claims