test 1

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Author:
riosjuank
ID:
232270
Filename:
test 1
Updated:
2013-09-04 00:37:13
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health insurance
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Description:
test chapter 11
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  1. 1. Which of the following insurance concepts is based on the ability to predict the approximate number ofdeaths or frequency of disabilities within a certain group during a specific time?

    A. Principle of large loss
    B. Indemnity law
    C. Law of large numbers
    D. Quantum insurance principle
    C. Law of large numbers
    (this multiple choice question has been scrambled)
  2. 2. A tornado is an example of a

    A. physical hazard
    B. speculative risk
    C. peril
    D. moral hazard
    C. peril
    (this multiple choice question has been scrambled)
  3. 3. All of the following actions are examples of risk avoidance EXCEPT:

    A. John never drives a car
    B. Pat pays his insurance premium
    C. Bill won't fly in an airplane
    D. Wendy keeps her money out of the stock market
    B. Pat pays his insurance premium
    (this multiple choice question has been scrambled)
  4. 4. Which of the following statements does NOT describe an element of an insurable risk?

    A. The loss must not be due to chance.
    B. The loss must be definite and measurable.
    C. The loss cannot be catastrophic.
    D. The loss exposures to be insured must be large.
    A. The loss must not be due to chance.
    (this multiple choice question has been scrambled)
  5. 5. Tom buys his wife Marya $50,000 diamond ring. When she is not wearing the ring, she keeps it in a safedeposit box at a local bank. This is an example of risk

    A. retention
    B. avoidance
    C. reduction
    D. transference
    C. reduction
    (this multiple choice question has been scrambled)
  6. 6. Buying insurance is one of the most effective ways of

    A. transferring risk
    B. retaining risk
    C. avoiding risk
    D. reducing risk
    A. transferring risk
    (this multiple choice question has been scrambled)
  7. 7. In the insurance business, risk can best be defined as:

    A. uncertainty regarding financial loss
    B. sharing the possibility of loss
    C. uncertainty regarding the future
    D. uncertainty regarding when death will occur
    A. uncertainty regarding financial loss
    (this multiple choice question has been scrambled)
  8. inventory without paying for them. What kind of hazard is described?

    A. Moral hazard
    B. Morale hazard
    C. Physical hazard
    D. Ethical hazard
    A. Moral hazard
    (this multiple choice question has been scrambled)
  9. 9. Which of the following best describes the function of insurance?

    A. It spreads financial risk over a large group to minimize the loss to anyone individual.
    B. It is a form of legalized gambling.
    C. It creates and protects risks.
    D. It protects against living too long.
    A. It spreads financial risk over a large group to minimize the loss to anyone individual.
    (this multiple choice question has been scrambled)
  10. 10. Which of the following statements is CORRECT?

    A. Only speculative risks are insurable.
    B. Both pure risks and speculative risks are insurable.
    C. Only pure risks are insurable.
    D. Neither pure risks nor speculative risks are insurable.
    C. Only pure risks are insurable.
    (this multiple choice question has been scrambled)

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