Question 1

Under the rule of indemnity the insured is limited collect only the amount of the loss.

Accepted Answer

A) True 
 B)False  True

Question 2

___ is the most common way of dealing with risk.

Accepted Answer

A)  Avoiding it 
B)  Shifting risk to others 
C)  Minimizing it 
D)  Self insurance B

Question 3

Risk is a daily fact of life for both individuals and businesses.

Accepted Answer

A) True 
 B)False  True

Question 4

The alternatives to handle risk include ____.

Accepted Answer

A)  avoid it 
B)  minimize it 
C)  handle it or transfer it 
D)  all of the above

Question 5

An insurable interest is required in order to purchase insurance.

Accepted Answer

A) True 
 B)False

Question 6

Crop insurance normally falls under a public insurance agency.

Accepted Answer

A) True 
 B)False

Question 7

Speculative risk only involves the change of loss.

Accepted Answer

A) True 
 B)False

Question 8

In order to be insured an applicant needs to show ____.

Accepted Answer

A)  a contract 
B)  a pure risk 
C)  an insurable interest 
D)  a determinable insurance need

Question 9

_____ is uncertainty about loss or injury.

Accepted Answer

A)  Insurance 
B)  Risk 
C)  Management 
D)  Accident

Question 10

Liability insurance protects a business against financial losses to others that the business was responsible for.

Accepted Answer

A) True 
 B)False

Exam 20: Personal Financial Planning

Under the rule of indemnity the insured is limited collect only the amount of the loss.