Risk & Return Table of Contents
What is Risk?	1
What is Risk Tolerance?	2
Investment risk	4
Inflation Risk	4
Protection Against Inflation	5
Diversification	6
Risk reduction	6
Measuring Risks	7
Alpha & Beta	7
Lifecycle Beta	8
Loss Frequency	8
Severity	8
Variation	8
Measuring Risk Further	9
Probability distribution	9
Expected Rate of Return	9
Standard deviation	9
Maximum Possible & Probable Loss	10
Living with Risk & Return	10
Interest Rate Risk	11
Value risk	11
Call risk	11
Business Risk	12
Diversifiable risk	12
Credit Risk	12
Market Risk	13
What is Total Risk?	13
Liquidity Risk	14
Portfolio Risk	14
Covariance & Correlation Coefficient	15
Efficient Portfolios	15
Asset Allocation	16
Guidelines for Asset Allocation	16
Expected Return	17
How Much Return is Required?	17
CAPM	17
Treating Risk	17
Two Basic Methods	18
Risk Control	18
Risk Financing	18
Risk Control Alternatives	19
Risk Avoidance	19
Combination, Segregation	19
Loss Prevention & Reduction	20
Noninsurance Transfers	20
Risk Financing Alternatives	21
Risk Retention	21
Risk Transfer	22
hedging contract, neutralization	23
hold-harmless agreement	23
Law of Large Numbers	24
law of averages	24
A Large Group of Homogeneous	25
The Loss Produced by Peril Must	26
The Occurrence of the Loss Must	26
The Loss Must be Large Enough	26
Affordable Premium Costs	26
The Chance of loss must be	26
The Peril Must be Unlikely to	26

United Insurance Educators, Inc.

PO Box 1030

Eatonville, WA 98328

(253) 846-1155

Email: mail@uiece.com

Website: www.uiece.com