Quiz-summary
0 of 10 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
Information
Free Practice Questions
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading...
You must sign in or sign up to start the quiz.
You have to finish following quiz, to start this quiz:
Results
0 of 10 questions answered correctly
Your time:
Time has elapsed
You have reached 0 of 0 points, (0)
Categories
- Not categorized 0%
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- Answered
- Review
-
Question 1 of 10
1. Question
Which of the following sentences defines loss exposure?
Correct
Loss exposure is a term used by authors and corporate risk managers to identify potential losses.
Incorrect
Loss exposure is a term used by authors and corporate risk managers to identify potential losses.
-
Question 2 of 10
2. Question
Hazard is a condition that creates or increases the frequency or severity of a loss. Which of the following are major types of hazards?
I. Physical hazard
II. Mental hazard
III. Legal hazard
IV. System hazardCorrect
The four major types of hazards are:
(1) Physical hazard
(2) Moral hazard
(3) Attitudinal hazard
(4) Legal hazardIncorrect
The four major types of hazards are:
(1) Physical hazard
(2) Moral hazard
(3) Attitudinal hazard
(4) Legal hazard -
Question 3 of 10
3. Question
Which of the following scenarios is an example of an indirect loss?
Correct
Indirect loss is defined as a financial loss that results indirectly from the occurrence of direct physical damage or theft loss.
Incorrect
Indirect loss is defined as a financial loss that results indirectly from the occurrence of direct physical damage or theft loss.
-
Question 4 of 10
4. Question
What is defined as a risk that involves the possibility of the loss or reduction of earned income, extra expenses, and the depletion of financial assets?
Correct
Personal risks directly affect an individual or family. Premature death, inadequate retirement income, poor health, and unemployment are some of the major personal risks that can cause great economic insecurity.
Incorrect
Personal risks directly affect an individual or family. Premature death, inadequate retirement income, poor health, and unemployment are some of the major personal risks that can cause great economic insecurity.
-
Question 5 of 10
5. Question
The presence of risk results in certain undesirable social and economic effects. Which of the following are the major burdens of risk on society?
I. The size of an emergency fund must be increased
II. Society is deprived of certain goods and services
III. Loss of income
IV. Worry and fear are presentCorrect
The three major burdens of risk in society are:
(1) Larger emergency fund
(2) Worry and fear
(3) Loss of certain goods and servicesIncorrect
The three major burdens of risk in society are:
(1) Larger emergency fund
(2) Worry and fear
(3) Loss of certain goods and services -
Question 6 of 10
6. Question
What are the basic characteristics of an insurance plan or arrangement?
I. Pooling of losses
II Payment of fortuitous losses
III. Premium is economically feasible
IV. Risk transferCorrect
The basic characteristics of an insurance plan or arrangement are the following:
(1) Pooling is the spreading of losses incurred by the few over the entire group so that in the process, the average loss is substituted for actual loss.
(2) Fortuitous loss is one that is unforeseen and unexpected by the insured and occurs as a result of chance.
(3) Risk transfer means that a pure risk is transferred from the insured to the insurer, who typically is in a stronger financial position to pay the loss than the insured.
(4) Indemnification means that the insured is restored to his or her approximate financial position before the occurrence of the loss.Incorrect
The basic characteristics of an insurance plan or arrangement are the following:
(1) Pooling is the spreading of losses incurred by the few over the entire group so that in the process, the average loss is substituted for actual loss.
(2) Fortuitous loss is one that is unforeseen and unexpected by the insured and occurs as a result of chance.
(3) Risk transfer means that a pure risk is transferred from the insured to the insurer, who typically is in a stronger financial position to pay the loss than the insured.
(4) Indemnification means that the insured is restored to his or her approximate financial position before the occurrence of the loss. -
Question 7 of 10
7. Question
What type of private insurance pays the death benefits, which will be given to the beneficiaries when the insured dies?
Correct
The benefits of life insurance pay for funeral expenses, uninsured medical bills, estate taxes, and other expenses. The death proceeds can also provide periodic income payments to the deceased’s beneficiary.
Incorrect
The benefits of life insurance pay for funeral expenses, uninsured medical bills, estate taxes, and other expenses. The death proceeds can also provide periodic income payments to the deceased’s beneficiary.
-
Question 8 of 10
8. Question
Fraudulent claims are one of the major social costs of insurance to society. Which of the following scenarios are examples of fraudulent claims?
I. Auto accidents are faked to collect benefits
II. Insureds exaggerate the amount and value of property stolen from a home or business
III. Disabled persons often malinger to collect disability-income benefits for a longer duration
IV. Phony burglaries, thefts, or acts of vandalism are reported to insurersCorrect
Fraudulent claims result in higher premiums to all insured. The existence of insurance also prompts some insureds to deliberately cause a loss to profit from insurance. These social costs fall directly on society.
Other examples of fraudulent claims include the following:
(1) Dishonest claimants inflate or pad an insurance claim to cover a required deductible.
(2) Dishonest claimants fake slip-and-fall accidents.
(3) False health insurance claims are submitted to collect benefits.
(4) Dishonest policyholders take out life insurance policies on unsuspecting insureds and later arrange to have them killed.Incorrect
Fraudulent claims result in higher premiums to all insured. The existence of insurance also prompts some insureds to deliberately cause a loss to profit from insurance. These social costs fall directly on society.
Other examples of fraudulent claims include the following:
(1) Dishonest claimants inflate or pad an insurance claim to cover a required deductible.
(2) Dishonest claimants fake slip-and-fall accidents.
(3) False health insurance claims are submitted to collect benefits.
(4) Dishonest policyholders take out life insurance policies on unsuspecting insureds and later arrange to have them killed. -
Question 9 of 10
9. Question
Which of the following statements are advantages of the risk retention technique in a risk management program?
I. Save on loss costs
II. Save on expenses
III. Possible higher taxes
IV. Possible higher expensesCorrect
The risk retention technique is appropriate primarily for high-frequency, low-severity risks where potential losses are relatively small.
Its major advantages in a risk management program are as follows:
(1) Save on loss costs
(2) Save on expenses
(3) Encourage loss prevention
(4) Increase cash flowIncorrect
The risk retention technique is appropriate primarily for high-frequency, low-severity risks where potential losses are relatively small.
Its major advantages in a risk management program are as follows:
(1) Save on loss costs
(2) Save on expenses
(3) Encourage loss prevention
(4) Increase cash flow -
Question 10 of 10
10. Question
Which of the following statements best describes personal risk management?
Correct
Personal risk management is the process of identifying loss exposures, measuring and analyzing it, selecting appropriate techniques for treating loss exposures, and implementing and reviewing the risk management program periodically.
Incorrect
Personal risk management is the process of identifying loss exposures, measuring and analyzing it, selecting appropriate techniques for treating loss exposures, and implementing and reviewing the risk management program periodically.