Question 1

Risk which can be measured using numerical scale are known as

Accepted Answer

A)  Quantifiable risk
B)  Static risk
C)  Dynamic risk
D)  Speculative risk A

Question 2

…………….. is planned retention by which the part or full of the exposure arising a risk factor is retained by the firm

Accepted Answer

A)  Reinsurance
B)  Self insurance
C)  Risk financing
D)  None of the above B

Question 3

Insurance is a risk management technique involving…

Accepted Answer

A)  Risk retention
B)  Risk avoidance
C)  Loss Control
D)  Risk transfer D

Question 4

…………. Refers to a situation where outcome is not certain

Accepted Answer

A)  Uncertainty
B)  Loss
C)  Insurance
D)  None of the above

Question 5

IRDA Act passed in the year…………..

Accepted Answer

A)  1972
B)  1999
C)  1989
D)  2000

Question 6

Speculative risk is a situation in which…………………… is possible

Accepted Answer

A)  Loss
B)  Profit
C)  Either a profit or loss
D)  None of the above

Question 7

A policy for protecting a group of employees in a firm is called………..

Accepted Answer

A)  General Insurance
B)  State life insurance
C)  Group insurance
D)  None of the above

Question 8

………… another name of fundamental risk

Accepted Answer

A)  Systematic risk
B)  Interest rate risk
C)  Group risk
D)  Loss

Question 9

Annual maintenance contract for computers is …………

Accepted Answer

A)  Risk avoidance
B)  Loss reduction
C)  Insurance
D)  Transfer of risk by contract

Question 10

Changes is technology is a example for …………

Accepted Answer

A)  Pure risk
B)  Speculative risk
C)  Static risk
D)  Dynamic risk

Question 11

Which of the following is a method of risk identification.

Accepted Answer

A)  Insurance
B)  Standard deviation method
C)  Checklist method
D)  None of these

Question 12

….. is a condition in which there is a possibility of an adverse deviation from a desired outcome that is expected or hope for.

Accepted Answer

A)  Loss
B)  Profit
C)  Risk
D)  Uncertainty

Question 13

In static risk.............

Accepted Answer

A)  Losses cannot be predicted
B)  Losses can be predicted
C)  Losses are not easily predictable
D)  None of these

Question 14

Willingness to retain whole or part of a given risk is called…………..

Accepted Answer

A)  Risk retention
B)  Risk carrying
C)  Risk bearing
D)  None of the above

Question 15

………………is an example for personal risk

Accepted Answer

A)  Business loss
B)  Fire occurred in business premises
C)  Risk of premature death
D)  None of the above

Question 16

Relative variation of actual loss from expected loss is called………

Accepted Answer

A)  Subjective risk
B)  Objective risk
C)  Actual loss
D)  Expected loss

Question 17

An escape from disability or death in a plain crash by refusing to fly is called…

Accepted Answer

A)  Risk shifting
B)  Risk avoidance
C)  Risk hedging
D)  None of these

Question 18

Risk evaluation breaks down into two parts. They are:

Accepted Answer

A)  Probability of loss occurring and its severity
B)  Risk calculation and risk analysis
C)  Loss calculation and avoidance
D)  None of the above

Question 19

If any risk is concerned with financial loss, it is termed as………..

Accepted Answer

A)  Business risk
B)  Business loss
C)  Financial risk
D)  Insurable claim

Question 20

………… is the process of reducing frequencies and severely of losses.

Accepted Answer

A)  Loss prevention
B)  Loss Control
C)  Avoidance of risk
D)  None of the above

Exam 1: Insurance Policy and Risk Management: Part A