The First Step in the Risk Management Process Is to Measure

question 315

True/False

The first step in the risk management process is to measure the frequency and severity of losses and their impact.

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Definitions:

Economizing Behavior

The practice of minimizing costs or expenditures while achieving desired outcomes.

Opportunity Cost

The penalty of overlooking the closest preferable alternative in the course of decision-taking.

Satisfaction

The feeling of pleasure or contentment arising from meeting one's needs or expectations.

Rational Choice

A theory in economics that assumes individuals always make prudent and logical decisions that provide them with the highest amount of personal utility.