Question 1

Which of the following is not a method of protection of risk?

Accepted Answer

A)  Group insurance plans 
B)  Employee benefits 
C)  Social insurance 
D)  Humanitarian aid 
A)  Group insurance plans 
B)  Employee benefits 
C)  Social insurance 
D)  Humanitarian aid

Question 2

What is the fundamental function of the insurance company-in other words, what is it the insurance company does that makes the insurance mechanism work?

Accepted Answer

A)  It pools those insureds having similar risks, and predicts the losses that those in the pool will suffer. 
B)  It pools any insureds who wish to purchase insurance, and attempts to predict the losses that those in the pool will suffer. 
C)  It redistributes government subsidies to those who have suffered catastrophes. 
D)  It eliminates the process of underwriting in order to sell insurance to as many people as possible, thus providing insureds with a huge quantity discount. 
A)  It pools those insureds having similar risks, and predicts the losses that those in the pool will suffer. 
B)  It pools any insureds who wish to purchase insurance, and attempts to predict the losses that those in the pool will suffer. 
C)  It redistributes government subsidies to those who have suffered catastrophes. 
D)  It eliminates the process of underwriting in order to sell insurance to as many people as possible, thus providing insureds with a huge quantity discount.

Question 3

The law of large numbers allows the insurer to predict aggregate dollar losses in advance of their occurrence.

Accepted Answer

A) True 
 B)False

Question 4

Why is a large number of exposure units generally required for a risk to be insurable?

Accepted Answer

A)  It prevents the insurer from losing money. 
B)  It guarantees that losses will be unintentional and measurable. 
C)  It enables the insurer to better predict the frequency and severity of losses (moderate). 
D)  It minimizes physical hazards. 
A)  It prevents the insurer from losing money. 
B)  It guarantees that losses will be unintentional and measurable. 
C)  It enables the insurer to better predict the frequency and severity of losses (moderate). 
D)  It minimizes physical hazards.

Question 5

Enterprise Risk Management is typically described as having the following characteristics, except:

Accepted Answer

A)  a top-down corporate focus 
B)  a broad scope of loss exposures 
C)  a portfolio perspective 
D)  a loose approach to risk identification, assessment, and treatment 
A)  a top-down corporate focus 
B)  a broad scope of loss exposures 
C)  a portfolio perspective 
D)  a loose approach to risk identification, assessment, and treatment

Question 6

Insurance companies utilize the law of large numbers to reduce the chance of loss for their insureds.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not a risk handling technique?

Accepted Answer

A)  Loss control 
B)  Loss diversification 
C)  Loss transfer 
D)  Loss financing 
A)  Loss control 
B)  Loss diversification 
C)  Loss transfer 
D)  Loss financing

Question 8

Risk averse people have a tendency to shy away from insurance.

Accepted Answer

A) True 
 B)False

Question 9

Why is Enterprise Risk Management so important for firms?

Accepted Answer

There has been a clear breakdown in corp

Question 10

A Pure Risk is defined as:

Accepted Answer

A)  an event that offer no opportunity for financial gain 
B)  the chance a loss will occur 
C)  a diversifiable risk 
D)  a contingency that increases the chance of a loss 
A)  an event that offer no opportunity for financial gain 
B)  the chance a loss will occur 
C)  a diversifiable risk 
D)  a contingency that increases the chance of a loss

Question 11

Describe the Risk Management Process.

Accepted Answer

The Risk Management Process is a systema

Which of the following is not a method of protection of risk?

What is the fundamental function of the insurance company-in other words, what is it the insurance company does that makes the insurance mechanism work?

The law of large numbers allows the insurer to predict aggregate dollar losses in advance of their occurrence.

Why is a large number of exposure units generally required for a risk to be insurable?

Enterprise Risk Management is typically described as having the following characteristics, except:

Insurance companies utilize the law of large numbers to reduce the chance of loss for their insureds.

Which of the following is not a risk handling technique?

Risk averse people have a tendency to shy away from insurance.

Why is Enterprise Risk Management so important for firms?

A Pure Risk is defined as:

Describe the Risk Management Process.

Risk Identification

Risk Assessment and Pooling

Risk-Handling Techniques: Loss Control, Risk Transfer, and Loss Financing

Risk-Handling Techniques: Diversification and Hedging

Fundamentals of Insurance

Insurable Perils and Insuring Organizations

Insurance Functions

Insurance Markets: Economics and Issues

Insurance Regulation

Insurance Contracts

The Personal Auto Policy

Homeowners Insurance

Professional Financial Planning

Life Insurance Policies

Standard Life Insurance Contract Provisions and Options

Annuities

Health Insurance and Disability Income

Employee Benefits

Social Security

Unemployment and Workers Compensation Insurance

Commercial Property Insurance

Commercial Liability Insurance

Filters

Exam 1: Introduction to Enterprise Risk Management and Insurance

Which of the following is not a method of protection of risk?

What is the fundamental function of the insurance company-in other words, what is it the insurance company does that makes the insurance mechanism work?

The law of large numbers allows the insurer to predict aggregate dollar losses in advance of their occurrence.

Why is a large number of exposure units generally required for a risk to be insurable?

Enterprise Risk Management is typically described as having the following characteristics, except:

Insurance companies utilize the law of large numbers to reduce the chance of loss for their insureds.

Which of the following is not a risk handling technique?

Risk averse people have a tendency to shy away from insurance.

Why is Enterprise Risk Management so important for firms?

A Pure Risk is defined as:

Describe the Risk Management Process.

Risk Identification

Risk Assessment and Pooling

Risk-Handling Techniques: Loss Control, Risk Transfer, and Loss Financing

Risk-Handling Techniques: Diversification and Hedging

Fundamentals of Insurance

Insurable Perils and Insuring Organizations

Insurance Functions

Insurance Markets: Economics and Issues

Insurance Regulation

Insurance Contracts

The Personal Auto Policy

Homeowners Insurance

Professional Financial Planning

Life Insurance Policies

Standard Life Insurance Contract Provisions and Options

Annuities

Health Insurance and Disability Income

Employee Benefits

Social Security

Unemployment and Workers Compensation Insurance

Commercial Property Insurance

Commercial Liability Insurance

Filters