What Is the Third Step of the Risk Management Process

question 9

Multiple Choice

What is the third step of the risk management process?

• A)Match appropriate risk management tools to exposure.
• B)Establish exposure.
• C)Implement.
• D)Identify available risk management tools.
• E)None of the above.

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Definitions:

Long-Run Equilibrium

A state in economics where all firms and consumers have fully adjusted to all changes in the market, resulting in the optimal distribution of resources in the long term.

Purely Competitive

A market structure characterized by a large number of small firms, a homogeneous product, perfect knowledge, and free entry and exit, resulting in firms being price takers.

Allocative Efficiency

The optimal distribution of resources in an economy, ensuring that each good or service is produced up to the point where the last unit provides a benefit equal to the cost of producing it.

Perfectly Elastic

Describes a situation in demand or supply where the quantity demanded or supplied changes by an infinite amount in response to any change in price.