Question 1

The chances of dying when young are much higher than the chances of becoming disabled when young.

Accepted Answer

A) True 
 B)False  False

Question 2

Workers' compensation insurance guarantees payment of wages,medical care,and rehabilitation services for employees who are injured on the job.

Accepted Answer

A) True 
 B)False  True

Question 3

Preferred Provider Organizations PPOs)offer medical care that is usually more expensive than HMOs.

Accepted Answer

A) True 
 B)False  True

Question 4

A type of event that makes risk management more important is:

Accepted Answer

A) terrorist threats. 
B) marketing mistakes. 
C) continuous increases in the stock market. 
D) larger numbers of employees in the average company. 
A) terrorist threats. 
B) marketing mistakes. 
C) continuous increases in the stock market. 
D) larger numbers of employees in the average company.

Question 5

An insurance company can use the law of large numbers to predict the number of people in your community that will have a car accident in a given month.

Accepted Answer

A) True 
 B)False

Question 6

Insurance companies make predictions such as how recent health trends will affect the number of heart attacks that men in the United States over the age of 45 will suffer.

Accepted Answer

A) True 
 B)False

Question 7

__________ insurance provides benefits to the survivors of workers who die as a result of work-related injuries.

Accepted Answer

A) Health 
B) Professional liability 
C) Workers' compensation 
D) Malpractice 
A) Health 
B) Professional liability 
C) Workers' compensation 
D) Malpractice

Question 8

Typically,the only option that firms have to deal with pure risk is to buy insurance.

Accepted Answer

A) True 
 B)False

Question 9

To save money,HMOs usually must approve treatment before it is given.

Accepted Answer

A) True 
 B)False

Question 10

The National Highway Traffic Safety Administration NHTSA)provides consumers with recall notices for all makes and models of cars,trucks,motorcycle,and even school buses.In terms of risk management,the purpose of the NHTSA service is:

Accepted Answer

A) To reduce risk. 
B) To avoid risk. 
C) To self-insure against risk. 
D) To make available the opportunity for vehicle owners to purchase insurance against risk. 
A) To reduce risk. 
B) To avoid risk. 
C) To self-insure against risk. 
D) To make available the opportunity for vehicle owners to purchase insurance against risk.

Question 11

Cary owns a life insurance policy on her husband Jay through Mutual of Cincinnati Life Insurance Company.As a policyholder,she also owns part of the company.

Accepted Answer

A) True 
 B)False

Question 12

The Best West Soccer Athletic Association was formed to administer youth soccer leagues and tournaments in a popular urban are A.All board members recently resigned stating that they could no longer assume the risk of participating on a board that did not insure its volunteer members against serious player injuries and other unanticipated problems.Collectively,these members are:

Accepted Answer

A) self-insuring against risk. 
B) avoiding risk. 
C) participating in risk reduction. 
D) filing a grievance against the association. 
A) self-insuring against risk. 
B) avoiding risk. 
C) participating in risk reduction. 
D) filing a grievance against the association.

Question 13

A ________ insurance company is owned by stockholders,just like any other investor-owned company.A ________ insurance company is owned by its policyholders.

Accepted Answer

A) stock;mutual 
B) corporate;stock 
C) stock;corporate 
D) mutual;limited liability 
A) stock;mutual 
B) corporate;stock 
C) stock;corporate 
D) mutual;limited liability

Question 14

There have been a series of large judgments in product liability cases against companies producing hairdryers.If this trend continues,insurance companies will respond by ________ the premiums charged for liability insurance for hairdryer manufacturers.

Accepted Answer

A) lowering 
B) canceling 
C) increasing 
D) underwriting 
A) lowering 
B) canceling 
C) increasing 
D) underwriting

Question 15

Insurance companies will provide coverage only for losses that are accidental.

Accepted Answer

A) True 
 B)False

Question 16

One afternoon Waata was called to the café.One of Waata's staff had inadvertently spilled hot coffee on a customer's arm and the customer was left with a burn.Waata sent the customer off to the local hospital for treatment knowing that his __________ insurance would cover the claim.

Accepted Answer

A) extended product liability 
B) malpractice 
C) public liability 
D) major medical 
A) extended product liability 
B) malpractice 
C) public liability 
D) major medical

Question 17

A managed care HMO system is more expensive than comprehensive health insurance providers.

Accepted Answer

A) True 
 B)False

Question 18

A characteristic of a health savings account that distinguishes it from other types of health care coverage is that it:

Accepted Answer

A) is not tax-deferred. 
B) allows people to save money for medical expenses in a tax-deferred account. 
C) covers only emergency procedures. 
D) provides unlimited access to routine medical services such as office visits)and minor medical tests and procedures such as blood tests and X-rays)at no cost. 
A) is not tax-deferred. 
B) allows people to save money for medical expenses in a tax-deferred account. 
C) covers only emergency procedures. 
D) provides unlimited access to routine medical services such as office visits)and minor medical tests and procedures such as blood tests and X-rays)at no cost.

Question 19

Demetrius was turned down when he attempted to buy a life insurance policy on his former Introduction to Business instructor.The most likely reason the insurance company turned down his attempt to insure the life of his former instructor was that:

Accepted Answer

A) The chance of the loss could not be measured. 
B) He did not have an insurable interest in the instructor's life. 
C) The instructor had already taken out a policy. 
D) The loss would not be accidental. 
A) The chance of the loss could not be measured. 
B) He did not have an insurable interest in the instructor's life. 
C) The instructor had already taken out a policy. 
D) The loss would not be accidental.

Question 20

The management of risk is a small part of global business.

Accepted Answer

A) True 
 B)False

Exam 24: Managing Risk

The chances of dying when young are much higher than the chances of becoming disabled when young.

Workers' compensation insurance guarantees payment of wages,medical care,and rehabilitation services for employees who are injured on the job.

Preferred Provider Organizations PPOs)offer medical care that is usually more expensive than HMOs.

A type of event that makes risk management more important is:

An insurance company can use the law of large numbers to predict the number of people in your community that will have a car accident in a given month.

Insurance companies make predictions such as how recent health trends will affect the number of heart attacks that men in the United States over the age of 45 will suffer.

__________ insurance provides benefits to the survivors of workers who die as a result of work-related injuries.

Typically,the only option that firms have to deal with pure risk is to buy insurance.

To save money,HMOs usually must approve treatment before it is given.

The National Highway Traffic Safety Administration NHTSA)provides consumers with recall notices for all makes and models of cars,trucks,motorcycle,and even school buses.In terms of risk management,the purpose of the NHTSA service is:

Cary owns a life insurance policy on her husband Jay through Mutual of Cincinnati Life Insurance Company.As a policyholder,she also owns part of the company.

A ________ insurance company is owned by stockholders,just like any other investor-owned company.A ________ insurance company is owned by its policyholders.

There have been a series of large judgments in product liability cases against companies producing hairdryers.If this trend continues,insurance companies will respond by ________ the premiums charged for liability insurance for hairdryer manufacturers.

Insurance companies will provide coverage only for losses that are accidental.

One afternoon Waata was called to the café.One of Waata's staff had inadvertently spilled hot coffee on a customer's arm and the customer was left with a burn.Waata sent the customer off to the local hospital for treatment knowing that his __________ insurance would cover the claim.

A managed care HMO system is more expensive than comprehensive health insurance providers.

A characteristic of a health savings account that distinguishes it from other types of health care coverage is that it:

Demetrius was turned down when he attempted to buy a life insurance policy on his former Introduction to Business instructor.The most likely reason the insurance company turned down his attempt to insure the life of his former instructor was that:

The management of risk is a small part of global business.

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding Economics and How It Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Union and Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money,financial Institutions,and the Federal Reserve

test Planning Table for Bonus Chapter A

Using Technology to Manage Information

Managing Personal Finances

Filters

A insurance company is owned by stockholders,just like any other investor-owned company.A insurance company is owned by its policyholders.