Question

A table showing losses that could occur and the corresponding chance that each loss could occur is called a(n)

Answers:	underwriting cycle.
	capital budget.
	loss distribution.
	risk map.

Answer the question and explain why.

Answer 1

Answer: Loss Distribution

Explanation:

Loss Distribution is the correct answer since it gives the expected amount of loss E[X], for a given loss amount X multiplied by its chances/probability of occuring f(x). So, a table that gives the distribution of amount of loss X and its probability is known as Loss Distribution.

Whereas,

Underwriting Cycle gives the tendency of the insurance industry to oscillate between profitable and unprofitable periods over time.

Capital budgeting is the planning process used to determine whether an organization should consider long term investments using cash funds through the firm's capitalization structure.

A risk mapping is a listing of all the relevant risks that might affect the company, where each single risk is placed in a two-dimensional space: impact and probability of occurrence.