Question

1. matt sometimes orders expensive electronics online from small websites to get the lowest price. he knows the chance of fraud is low, but if it happened, the financial impact would be high. why is evaluating both probability and seriousness important here?

because all risks with low probability should be assumed
because a low - probability risk can still be serious and costly
because high seriousness always means high probability
because only probability matters when deciding on risks

1. erin’s health plan allows her to see any specialist she wants without getting a referral from her doctor, but her costs are higher when she goes outside a preferred network. which type of plan does she most likely have?

hmo
fee - for - service
ppo
temporary health plan

Explanation:

For question 5:

• Risk assessment involves both probability and impact. Just because a risk has low probability doesn't mean it can be ignored if its impact (seriousness) is high.

For question 6:

• A PPO (Preferred Provider Organization) plan allows members to see specialists without referrals. However, costs are lower within the preferred network and higher outside of it. An HMO (Health Maintenance Organization) usually requires referrals. Fee - for - service plans are more traditional and not as structured in terms of network costs. A temporary health plan is not relevant in this context.

Answer:

1. Because a low - probability risk can still be serious and costly
2. PPO