Insurance

5 years ago

Which of the following types of loss exposures may be appropriately handled through the purchase of ...

Which of the following types of loss exposures may be appropriately handled through the purchase of insurance?
I. High-frequency, low-severity loss exposures
II. Low-frequency, high-severity loss exposures
A) I only
B) II only

AzJose 82 2 Replies

5 years ago

All of the following statements about the administration of a risk management program are true ...

All of the following statements about the administration of a risk management program are true EXCEPT
A) The risk manager is an important part of a firm's management team.
B) A risk management policy statement can be used to educate to

AzJose 55 1 Reply

6 years ago

Ryan decided to review his personal risk management program. His car is 10 years old, and he would ...

Ryan decided to review his personal risk management program. His car is 10 years old, and he would receive little money from his insurer if the car was damaged or destroyed. Ryan decided to drop the physical damage insurance on the car. From a risk m

AzJose 72 1 Reply

6 years ago

Which of the following statements about a personal risk management program is (are) true?I.Insurance ...

Which of the following statements about a personal risk management program is (are) true?
I. Insurance and retention are the only techniques used to handle potential losses.
II. The steps in a personal risk management process are the same s

AzJose 52 2 Replies

5 years ago

Bev lives in the suburbs and works downtown. She drives to work, and her most direct route to work ...

Bev lives in the suburbs and works downtown. She drives to work, and her most direct route to work would require her to pass through an area where carjackings and drive-by-shootings are common. Bev does not drive through this area. Instead, she uses

AzJose 59 1 Reply

sfinaki

6 years ago

A useful measure for an organization is the total of the organization's expenditures for treating ...

A useful measure for an organization is the total of the organization's expenditures for treating loss exposures including retained losses, loss control expenses, insurance premiums, and other related expenses. This measure is called the organiz

AzJose 71 2 Replies

5 years ago

Purchasing health insurance illustrates the use of which personal risk management technique?

Purchasing health insurance illustrates the use of which personal risk management technique?
A) avoidance
B) risk transfer
C) risk control
D) risk retention

AzJose 70 2 Replies

5 years ago

When he became risk manager of Boller Company, Derrick Huang noticed that the company did not have a ...

When he became risk manager of Boller Company, Derrick Huang noticed that the company did not have a clear set of risk management objectives and a clearly-stated risk management philosophy. Derrick developed a written document stating the company

AzJose 112 1 Reply

6 years ago

The U.S. government is concerned that terrorists might try to crash a vehicle filled with explosives ...

The U.S. government is concerned that terrorists might try to crash a vehicle filled with explosives into a U.S. embassy in a foreign country. Inside the gate to the embassy, they installed steel and cement posts in the road. These posts can be raise

AzJose 85 2 Replies

5 years ago

A company has a fleet of 200 vehicles. On average, 50 vehicles per year experience property damage. ...

A company has a fleet of 200 vehicles. On average, 50 vehicles per year experience property damage. What is the probability that any vehicle will be damaged in any given year?
A) 10 percent
B) 20 percent
C) 25 percent
D) 50 percen

AzJose 107 2 Replies

5 years ago

RST Company has production facilities in Salt Lake City and Cleveland. The probability that in any ...

RST Company has production facilities in Salt Lake City and Cleveland. The probability that in any given year a fire will damage the production facility in Salt Lake City is 5 percent. The probability that in any given year a fire will damage the Cle

AzJose 229 2 Replies

5 years ago

Some events cannot occur together because the occurrence of one event makes the occurrence of the ...

Some events cannot occur together because the occurrence of one event makes the occurrence of the second event impossible. Such events are called
A) dependent events.
B) independent events.
C) conditional events.
D) mutually exclu

AzJose 105 1 Reply

6 years ago

Two buildings are located close together at a production facility. The probability that either of ...

Two buildings are located close together at a production facility. The probability that either of these buildings will experience a fire loss is 4 percent. However, if one building has a fire, the probability that the second building will have a fire

AzJose 56 2 Replies

5 years ago

Which of the following statements is (are) true with regard to probability analysis?I.If two events ...

Which of the following statements is (are) true with regard to probability analysis?
I. If two events are independent, the occurrence of one event does not affect the occurrence of the second event.
II. If two events are dependent, the occu

AzJose 51 1 Reply

6 years ago

Which of the following statements is (are) true with respect to the time value of money?I.Money ...

Which of the following statements is (are) true with respect to the time value of money?
I. Money received today is worth more than the same amount of money received in the future.
II. The present value of a future amount is greater than th

AzJose 44 1 Reply

6 years ago

Calculating the present value of a future amount is called

Calculating the present value of a future amount is called
A) interpolating.
B) discounting.
C) compounding.
D) regression analysis.

AzJose 76 2 Replies

5 years ago

The process of determining which set of investments in plant and equipment to undertake is called

The process of determining which set of investments in plant and equipment to undertake is called
A) regression analysis.
B) loss forecasting.
C) time value of money analysis
D) capital budgeting.

AzJose 56 1 Reply

6 years ago

Terrorists attacked the World Trade Center on September 11, 2001. The attack simultaneously created ...

Terrorists attacked the World Trade Center on September 11, 2001. The attack simultaneously created large losses for life insurers, property insurers, workers compensation insurers, health insurers, and liability insurers. What name is given to an ev

AzJose 61 1 Reply

6 years ago

LMN Insurance Company is concerned about its exposure to hurricane losses for property risks it ...

LMN Insurance Company is concerned about its exposure to hurricane losses for property risks it insured on the Gulf Coast. LMN borrowed money from investors by issuing financial securities. LMN promised to repay the money it borrowed with interest if

AzJose 62 2 Replies

5 years ago

Reasons to adopt an enterprise risk management plan include all of the following EXCEPT

Reasons to adopt an enterprise risk management plan include all of the following EXCEPT
A) to increase earnings volatility.
B) to treat risks facing the business in a more holistic way.
C) to increase net income.
D) to gain an adv

AzJose 77 2 Replies

5 years ago

Uncertainty pertaining to the organization's goals and objectives and the organization's ...

Uncertainty pertaining to the organization's goals and objectives and the organization's strengths, weaknesses, opportunities, and threats is called
A) operational risk.
B) strategic risk.
C) subjective risk.
D) pure

AzJose 86 1 Reply

6 years ago

Five Below Zero is a new ski resort in Colorado. Five Below Zero is concerned that an abnormally ...

Five Below Zero is a new ski resort in Colorado. Five Below Zero is concerned that an abnormally warm winter will prevent the accumulation of snow needed to have a profitable ski season. Five Below Zero purchased a contract that will pay Five Below Z

AzJose 84 1 Reply

6 years ago

Which of the following statements regarding terrorism insurance is (are) true?I.There is a federal ...

Which of the following statements regarding terrorism insurance is (are) true?
I. There is a federal backstop if terrorism claims are catastrophic.
II. Private insurers market terrorism insurance.
A) I only
B) II only
C)

AzJose 55 1 Reply

sfinaki

6 years ago

Last year, XYZ Insurance Company had a combined ratio of 102.4 and lost $10.2 million on the ...

Last year, XYZ Insurance Company had a combined ratio of 102.4 and lost $10.2 million on the insurance that it sold. The company, however, was required to pay income taxes. The best explanation for this apparent contradiction is that XYZ offset its u

AzJose 107 2 Replies

5 years ago

ABC Company in considering a loss control investment. The project will cost $100,000. It will ...

ABC Company in considering a loss control investment. The project will cost $100,000. It will generate an after-tax net cash flow of $60,000 one year after investment and an after-tax net cash flow of $60,000 two years after investment. The present v

AzJose 80 1 Reply

sfinaki

6 years ago

Which of the following statements about stock insurers is true?

Which of the following statements about stock insurers is true?
A) They issue assessable policies.
B) They are not permitted to write property and liability insurance.
C) Stockholders bear any losses and share in any profits.
D) T

AzJose 57 1 Reply

6 years ago

Which of the following statements about mutual insurers is true?

Which of the following statements about mutual insurers is true?
A) They are legally organized as partnerships.
B) They have a board of directors which is selected by state insurance departments.
C) They are owned by their stockholders

AzJose 86 2 Replies

5 years ago

Why are some mutual insurers referred to as "assessment mutuals"?

Why are some mutual insurers referred to as "assessment mutuals"?
A) They charge low premiums because the loss exposures of their insureds are thoroughly assessed before a policy is written.
B) They are noted for being very thorou

AzJose 70 1 Reply

6 years ago

Which of the following statements about a reciprocal exchange is (are) true?I.It usually specializes ...

Which of the following statements about a reciprocal exchange is (are) true?
I. It usually specializes in health insurance.
II. It is an unincorporated mutual insurance company.
A) I only
B) II only
C) both I and II
D)

AzJose 54 2 Replies

5 years ago

Temporary evidence of insurance until a policy is actually issued is provided by a(n)

Temporary evidence of insurance until a policy is actually issued is provided by a(n)
A) binder.
B) brokerage agreement.
C) pre-approval form.
D) endorsement.

AzJose 75 2 Replies

5 years ago

Neil needs insurance that is unavailable in the state where he lives. To obtain insurance from a ...

Neil needs insurance that is unavailable in the state where he lives. To obtain insurance from a nonadmitted insurer, Neil should contact a
A) surplus lines broker.
B) nonadmitted agent.
C) general agency broker.
D) direct writer.

AzJose 137 2 Replies

5 years ago

Advantages of the direct response system for marketing life insurance include which of the ...

Advantages of the direct response system for marketing life insurance include which of the following?
I. Advertising can be specifically directed to selected markets.
II. Complex products can be easily sold.
A) I only
B) II only

AzJose 58 1 Reply

6 years ago

Which of the following is characteristic of a typical mass merchandising plan?

Which of the following is characteristic of a typical mass merchandising plan?
A) higher commission scales for agents and higher administrative expenses
B) payment of premiums through payroll deduction
C) group rather than individual u

AzJose 72 1 Reply

6 years ago

Cathy just started a job with XYZ Manufacturing Company. She attended an orientation and was given a ...

Cathy just started a job with XYZ Manufacturing Company. She attended an orientation and was given a packet providing information about the various employee benefits XYZ offers. One item in the packet was a booklet and application form from an auto i

AzJose 59 1 Reply

6 years ago

Brian buys and sells investment securities for his clients. Brian also decided to become a licensed ...

Brian buys and sells investment securities for his clients. Brian also decided to become a licensed life insurance agent to better serve his customers. While Brian's primary focus is buying and selling financial securities for his clients in exc

AzJose 187 2 Replies

5 years ago

Big Mutual Insurance Company would like to take advantage of financial services deregulation by ...

Big Mutual Insurance Company would like to take advantage of financial services deregulation by acquiring a bank and a stock brokerage firm. Big Mutual, however, would have trouble raising the funds needed to make these acquisitions under the mutual

AzJose 80 2 Replies

5 years ago

The financial services field is currently experiencing consolidation and convergence. If both of ...

The financial services field is currently experiencing consolidation and convergence. If both of these trends continue, in the future we should observe
A) fewer financial institutions offering a narrower range of financial services products.

AzJose 48 2 Replies

5 years ago

Which of the following statements is (are) true about savings bank life insurance (SBLI)?I.Each ...

Which of the following statements is (are) true about savings bank life insurance (SBLI)?
I. Each depositor at the savings bank receives life insurance equal to his or her savings account balance.
II. The goal of SBLI is to provide low-cos

AzJose 58 1 Reply

6 years ago

The underwriting process begins with the

The underwriting process begins with the
A) agent.
B) desk underwriter.
C) inspection report.
D) acceptance of the application.

AzJose 75 1 Reply