Insurance

In making your personal risk management decisions, which method would be the most feasible and the ...

In making your personal risk management decisions, which method would be the most feasible and the ...

In making your personal risk management decisions, which method would be the most feasible and the most economical for handling chipped windshields on your automobile?
A) Avoid (don't drive)
B) Retain (pay for them yourself)
C) In

keyone   74   1 Reply

giddu

To estimate potential property losses, risk managers must know:

To estimate potential property losses, risk managers must know:

To estimate potential property losses, risk managers must know:
A) the accounting book value of property
B) the replacement cost of property
C) the actual cash value of property
D) the original purchase price of property

keyone   67   1 Reply

giddu

All of the following are considered a financial risk handled by financial risk management except:

All of the following are considered a financial risk handled by financial risk management except:

All of the following are considered a financial risk handled by financial risk management except:
A) currency risk
B) liquidity risk
C) product marketability risk
D) commodity price risk

medulla   97   1 Reply

national

Enterprise risk management is concerned with:

Enterprise risk management is concerned with:

Enterprise risk management is concerned with:
A) both pure and speculative risks
B) insurance contracts
C) pure risks
D) subjective risks

keyone   81   1 Reply

giddu

Which of the following statements about financial risks is not true?

Which of the following statements about financial risks is not true?

Which of the following statements about financial risks is not true?
A) Many financial risks are attributable to fluctuations in value.
B) Financial risks arise from events that prevent a firm from conducting its normal scope of operations.

medulla   104   1 Reply

national

If assumption of the risk is established, it means the defendant usually must pay for damages.T/F?

If assumption of the risk is established, it means the defendant usually must pay for damages.T/F?

If assumption of the risk is established, it means the defendant usually must pay for damages.
T/F?

medulla   68   1 Reply

national

An ethics violation is an example of a strategic risk.T/F?

An ethics violation is an example of a strategic risk.T/F?

An ethics violation is an example of a strategic risk.
T/F?

medulla   66   1 Reply

jameel

Which of the following is not a benefit of forecasting future losses?

Which of the following is not a benefit of forecasting future losses?

Which of the following is not a benefit of forecasting future losses?
A) Better estimate of insurance costs
B) More appropriate budgeting of financial impact of the losses
C) Better selection of optimal risk-handling techniques
D)

keyone   73   1 Reply

national

A random variable: (Multiple Choice)

A random variable: (Multiple Choice)

A random variable:
A) is a variable whose future value is known with certainty
B) can be given a probability of occurrence by the risk manager
C) is completely outside the control of the risk manager
D) is not measurable

medulla   67   1 Reply

national

Which of the following statements about the standard deviation is correct?

Which of the following statements about the standard deviation is correct?

Which of the following statements about the standard deviation is correct?
A) The standard deviation measures the expected loss for the firm.
B) The standard deviation is calculated by taking the square root of the variance.
C) The sta

medulla   109   1 Reply

giddu

Which of the following statements about the expected average loss is not correct?

Which of the following statements about the expected average loss is not correct?

Which of the following statements about the expected average loss is not correct?
A) The average loss is guaranteed to happen in the upcoming year.
B) The average loss will be expressed in dollars.
C) The average loss is a tool for ris

medulla   152   1 Reply

giddu

Which of the following statements about the average loss severity and average loss frequency is not ...

Which of the following statements about the average loss severity and average loss frequency is not ...

Which of the following statements about the average loss severity and average loss frequency is not correct?
A) The average loss severity represents the average size of losses that might occur.
B) The average loss frequency represents the a

keyone   165   1 Reply

giddu

Which of the following statements about convolution is not correct?

Which of the following statements about convolution is not correct?

Which of the following statements about convolution is not correct?
A) Regardless of the number of possible outcomes, risk managers still perform convolution calculations by hand.
B) Convolution uses joint probabilities to estimate the com

medulla   114   1 Reply

national

"Independence" in an insurance pool means:

"Independence" in an insurance pool means:

"Independence" in an insurance pool means:
A) the bad risks pay more for insurance than good risks
B) the members of the pool exhibit the same level of risk
C) those who experience losses have their premiums raised
D) th

medulla   185   1 Reply

jameel

Which of the following statements about the risk pooling is correct?

Which of the following statements about the risk pooling is correct?

Which of the following statements about the risk pooling is correct?
A) Risk pooling works best if the parties involved have heterogeneous risk characteristics.
B) Risk pooling works best if the number of parties involved is small.
C)

keyone   107   1 Reply

national

Which of the following statements about the risk pooling is correct?

Which of the following statements about the risk pooling is correct?

Which of the following statements about the risk pooling is correct?
A) Risk pooling works best if the number of parties involved is small.
B) Risk pooling reduces the standard deviation of the loss distribution.
C) Risk pooling increa

keyone   261   1 Reply

national

Which of the following statements about the risk reduction is correct?

Which of the following statements about the risk reduction is correct?

Which of the following statements about the risk reduction is correct?
A) When the probability distribution is non-normal, risk cannot be reduced by increasing the pool size.
B) After the pool size has reached 36, risk can no longer be redu

keyone   58   1 Reply

national

Given the requisites of risk pooling, which of the following exposures would make the best subject ...

Given the requisites of risk pooling, which of the following exposures would make the best subject ...

Given the requisites of risk pooling, which of the following exposures would make the best subject of a profitable insurance pool? Assume a premium appropriate to the exposure is charged and analyze the exposure from the insurer's standpoint.

keyone   105   1 Reply

national

Which of the following statements about the confidence interval is correct?

Which of the following statements about the confidence interval is correct?

Which of the following statements about the confidence interval is correct?
A) A confidence interval tells the insurer something about how confident it should be about the calculated risk premium.
B) A confidence interval tells the insurer

keyone   114   1 Reply

national

What is the so-called Risk Charge?

What is the so-called Risk Charge?

What is the so-called Risk Charge?
A) Risk Charge represents how much an insurance company should charge for people not paying their insurance premium.
B) Risk Charge represents the margin of error arising from estimating an unknown variabl

medulla   81   1 Reply

jameel

Which of the following statements about the risk charge is correct?

Which of the following statements about the risk charge is correct?

Which of the following statements about the risk charge is correct?
A) The Risk Charge represents how much an insurance company should charge for people not paying their insurance premium.
B) The Risk Charge can only be calculated when the

medulla   104   1 Reply

jameel

Which of the following would be least important in making a self-insurance decision?

Which of the following would be least important in making a self-insurance decision?

Which of the following would be least important in making a self-insurance decision?
A) The size of the risk pool
B) Social and ethical concerns
C) Historical management policy
D) Financial ability to pay losses

medulla   95   1 Reply

jameel

The third step in risk management is:

The third step in risk management is:

The third step in risk management is:
A) creating large enough pools to diversity risk
B) the process of the assessment of risk
C) the process of identifying risk tools
D) the process of identifying possible risks that can occur

medulla   77   1 Reply

jameel

The probability distribution associated with the role of a die:

The probability distribution associated with the role of a die:

The probability distribution associated with the role of a die:
A) can be used to forecast the risk of restaurant law suits
B) is a non-normal distribution
C) is known in advance
D) can not be identified

keyone   55   1 Reply

jameel

Why does a risk manager typically focus on the upper tail of the probability distribution?

Why does a risk manager typically focus on the upper tail of the probability distribution?

Why does a risk manager typically focus on the upper tail of the probability distribution?
A) The upper tail shows the amount of coverage of the risk a firm faces.
B) The upper tail shows the total risk pool.
C) The upper tail shows th

medulla   154   1 Reply

jameel

An insurance applicant dying from cancer is not likely to be able to get insurance because:

An insurance applicant dying from cancer is not likely to be able to get insurance because:

An insurance applicant dying from cancer is not likely to be able to get insurance because:
A) it is impossible to estimate the loss
B) the probability of loss is extremely high and thus the price for coverage would be uneconomical
C)

medulla   81   1 Reply

giddu

The use of loss distributions lead to a subjective estimate of risk exposure.T/F?

The use of loss distributions lead to a subjective estimate of risk exposure.T/F?

The use of loss distributions lead to a subjective estimate of risk exposure.
T/F?

keyone   196   1 Reply

giddu

A Risk Manager needs more information than just the loss frequency and loss severity to assess the ...

A Risk Manager needs more information than just the loss frequency and loss severity to assess the ...

A Risk Manager needs more information than just the loss frequency and loss severity to assess the risk exposure of their firm.
T/F?

medulla   91   1 Reply

giddu

A risk pool needs a small group of similar exposures for predictive accuracy.T/F?

A risk pool needs a small group of similar exposures for predictive accuracy.T/F?

A risk pool needs a small group of similar exposures for predictive accuracy.
T/F?

medulla   87   1 Reply

jameel

Risk Pooling is the ability to reduce the risk of a unit by making more accurate predictions about a ...

Risk Pooling is the ability to reduce the risk of a unit by making more accurate predictions about a ...

Risk Pooling is the ability to reduce the risk of a unit by making more accurate predictions about a large pool of units.
T/F?

medulla   94   1 Reply

jameel

The Risk Charge represents the error arising from estimating a known variable.T/F?

The Risk Charge represents the error arising from estimating a known variable.T/F?

The Risk Charge represents the error arising from estimating a known variable.
T/F?

medulla   191   1 Reply

national

Why is risk reduced by creating a large pool of exposure units?

Why is risk reduced by creating a large pool of exposure units?

Why is risk reduced by creating a large pool of exposure units?

medulla   91   1 Reply

giddu

Risk avoidance is the best risk management tool when the change of loss is ________ and the ...

Risk avoidance is the best risk management tool when the change of loss is ________ and the ...

Risk avoidance is the best risk management tool when the change of loss is ________ and the potential severity of loss is ________.
A) low, low
B) high, high
C) low, high
D) high, low

keyone   113   1 Reply

jameel

Risk Retention is not a good idea if:

Risk Retention is not a good idea if:

Risk Retention is not a good idea if:
A) the risk is unimportant
B) you did not identify the risk
C) the frequency is so low it almost will never happen
D) the exposure is potentially catastrophic

keyone   128   1 Reply

national

Risk assumption is the best risk management tool when the change of loss is ________ and the ...

Risk assumption is the best risk management tool when the change of loss is ________ and the ...

Risk assumption is the best risk management tool when the change of loss is ________ and the potential severity of loss is ________.
A) low, low
B) high, high
C) low, high
D) high, low

medulla   79   1 Reply

national

All of the following are ways of managing risk mentioned in the text, except:

All of the following are ways of managing risk mentioned in the text, except:

All of the following are ways of managing risk mentioned in the text, except:
A) competitive bidding
B) transfer
C) avoidance
D) assumption

medulla   71   1 Reply

national

From the standpoint of the insured, deductibles in insurance contracts are a form of:

From the standpoint of the insured, deductibles in insurance contracts are a form of:

From the standpoint of the insured, deductibles in insurance contracts are a form of:
A) risk transfer
B) loss control
C) risk retention
D) risk avoidance

keyone   71   1 Reply

jameel

An automobile's airbag is primarily there for:

An automobile's airbag is primarily there for:

An automobile's airbag is primarily there for:
A) loss prevention
B) loss avoidance
C) loss reduction
D) risk assumption

keyone   234   1 Reply

giddu

Which of the following statements about the loss control is not correct?

Which of the following statements about the loss control is not correct?

Which of the following statements about the loss control is not correct?
A) Loss control is also known as risk control.
B) Loss control can be classified into two categories, namely loss prevention and loss reduction.
C) A number of ac

medulla   97   1 Reply

national

Which of the following statements about risk-bearing financial institutions is not correct?

Which of the following statements about risk-bearing financial institutions is not correct?

Which of the following statements about risk-bearing financial institutions is not correct?
A) They are a good example of creating self-insurance by the customers of these institutions.
B) They allow its customers to transfer their financia

medulla   219   1 Reply

national