Test in Progress

Select a response for each question below.

1. Which of the following would best define insuring a risk from an insurance point of view?

a. Financial investments of a speculative nature.
b. Probability that a loss will occur.
c. Absolute knowledge that a loss will occur..
d. The chance of or uncertainty concerning a financial loss.

2. Obtaining insurance is a method of:

a. Transferring financial risk
b. Evaluating financial risk
c. Eliminating financial risk
d. Identifying financial risk

3. Which of the following is NOT a necessary element in risk management?

a. The identification of risks
b. The evaluation of risks
c. The selection of the most advantageous method of treatment.
d. The evaluation and selection of a program of insurance.

4. When an insurance company rates a large number of risks based on their related characteristics and puts them into the same classification for rating purposes it would be called:

a. Application of the Indemnity Principle
b. Large number of similar exposures
c. Large number of associated risks
d. Actuarial Disposition of risks