In Schedule Rating,each Building Is Individually Rated on Several Factors

question 35

Multiple Choice

In schedule rating,each building is individually rated on several factors.One factor refers to the quality of the city's water supply and fire department,and the risk control devices installed in the building.This factor is called

• A)exposure.
• B)occupancy.
• C)protection.
• D)housekeeping.

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Definitions:

Diversification

Practice of reducing risk by allocating resources to a variety of activities whose outcomes are not closely related.

Risk-Free Asset

An investment that is expected to return its original value without any loss and with a certain rate of interest.

Positively Correlated

A relationship between two variables where both variables move in the same direction, meaning that as one variable increases, the other also increases, and vice versa.

Diversification Objective

A strategy aimed at reducing risk by allocating investments among various financial instruments, industries, or other categories.