Question 1

When one of Waata's employees was stocking a particularly high shelf one morning he reached a bit too far and fell off the ladder.Luckily he just broke his arm and returned to work later that day.His medical bills due to this accident were covered under:

Accepted Answer

A)  workers' compensation.
B)  disability insurance.
C)  liability insurance.
D)  his own health insurance.E) B) and C)
F) A) and D)

Question 2

An entrepreneur takes a speculative risk when starting a new business.

Accepted Answer

A) True 
 B)False

Question 3

It's good advice for doctors and lawyers to carry malpractice insurance.

Accepted Answer

A) True 
 B)False

Question 4

Abraham is excited about opening his car wash facility.The required investment of money and time is sizable and although he has high hopes,Abraham is taking a speculative risk.This means that:

Accepted Answer

A)  his investment involves a chance of profit or loss.
B)  his risk can be shifted to an insurance company if he buys product liability insurance.
C)  he would be best advised to self-insure his exposure to malpractice liability.
D)  his insurance premium would be based on the law of large numbers.E) C) and D)
F) A) and B)

Question 5

One advantage of health savings accounts is that healthy people can use tax-deferred money to save for their future medical needs.

Accepted Answer

A) True 
 B)False

Question 6

A stock insurance company is owned by its policyholders.

Accepted Answer

A) True 
 B)False

Question 7

In an effort to minimize the cost of conventional property/casualty insurance,XYZ Electronics decided to manage their risk by self-insuring.The most likely way XYZ would try to do this would be to:

Accepted Answer

A)  cover small and medium sized losses itself,and carry conventional insurance only for catastrophic losses.
B)  carry insurance for the small,routine losses and pay for any highly unusual major losses with its own funds.
C)  buy an insurance policy that covers all risks.
D)  establish a well-monitored loss-prevention program.E) B) and C)
F) A) and D)

Question 8

The Pension Benefit Guaranty Corporation provides retirement benefits,life insurance,health insurance,and disability income insurance.

Accepted Answer

A) True 
 B)False

Question 9

The risk of environmental harm is __________ in proportions in issues such as global warming.

Accepted Answer

A)  local
B)  regional
C)  national
D)  internationalE) None of the above
F) A) and B)

Question 10

Health savings accounts are managed care plans that have a high deductible.

Accepted Answer

A) True 
 B)False

Question 11

Explain what makes the acceptance of risk possible for insurance companies.

Accepted Answer

The law of large numbers states that if ...

Question 12

Professional liability insurance is also sometimes known as malpractice insurance.

Accepted Answer

A) True 
 B)False

Question 13

The chance of a fire is an example of a pure risk.

Accepted Answer

A) True 
 B)False

Question 14

The best strategy for a profit-seeking insurance company would be to specialize in providing protection to people in a specific geographical are
A.

Accepted Answer

A) True 
 B)False

Question 15

Risk management is:

Accepted Answer

A)  only a consideration to insurance companies.
B)  increasing in importance.
C)  decreasing in importance.
D)  used exclusively when engaging in global Internet business.E) A) and C)
F) A) and D)

Question 16

Risk is a term that refers to the chance of loss,the degree of probability of loss,and the amount of possible loss.

Accepted Answer

A) True 
 B)False

Question 17

Product recalls can reduce risk.

Accepted Answer

A) True 
 B)False

Question 18

Risk management for business is critical due in part to:

Accepted Answer

A)  natural disasters.
B)  profitability.
C)  legal requirements.
D)  international requirements.E) B) and C)
F) A) and D)

Question 19

Explain the four ways of managing risk.

Accepted Answer

The four ways of managing risk include 1...

Question 20

Speculative risk involves a chance of either profit or loss.

Accepted Answer

A) True 
 B)False

Exam 24: Managing Risk

The best strategy for a profit-seeking insurance company would be to specialize in providing protection to people in a specific geographical are A.

Correct AnswerverifiedShow Answer

The chance of a fire is an example of a pure risk.

Correct AnswerverifiedShow Answer

Speculative risk involves a chance of either profit or loss.

Correct AnswerverifiedShow Answer

One advantage of health savings accounts is that healthy people can use tax-deferred money to save for their future medical needs.

Correct AnswerverifiedShow Answer

Risk management for business is critical due in part to:

Correct AnswerverifiedShow Answer

It's good advice for doctors and lawyers to carry malpractice insurance.

Correct AnswerverifiedShow Answer

A stock insurance company is owned by its policyholders.

Correct AnswerverifiedShow Answer

Risk is a term that refers to the chance of loss,the degree of probability of loss,and the amount of possible loss.

Correct AnswerverifiedShow Answer

Product recalls can reduce risk.

Correct AnswerverifiedShow Answer

The risk of environmental harm is __________ in proportions in issues such as global warming.

Correct AnswerverifiedShow Answer

Professional liability insurance is also sometimes known as malpractice insurance.

Correct AnswerverifiedShow Answer

Risk management is:

Correct AnswerverifiedShow Answer

When one of Waata's employees was stocking a particularly high shelf one morning he reached a bit too far and fell off the ladder.Luckily he just broke his arm and returned to work later that day.His medical bills due to this accident were covered under:

Correct AnswerverifiedShow Answer

The Pension Benefit Guaranty Corporation provides retirement benefits,life insurance,health insurance,and disability income insurance.

Correct AnswerverifiedShow Answer

Abraham is excited about opening his car wash facility.The required investment of money and time is sizable and although he has high hopes,Abraham is taking a speculative risk.This means that:

Correct AnswerverifiedShow Answer

Explain what makes the acceptance of risk possible for insurance companies.

Correct AnswerverifiedThe law of large numbers states that if ...View AnswerShow Answer

Explain the four ways of managing risk.

Correct AnswerverifiedThe four ways of managing risk include 1...View AnswerShow Answer

Health savings accounts are managed care plans that have a high deductible.

Correct AnswerverifiedShow Answer

In an effort to minimize the cost of conventional property/casualty insurance,XYZ Electronics decided to manage their risk by self-insuring.The most likely way XYZ would try to do this would be to:

Correct AnswerverifiedShow Answer

An entrepreneur takes a speculative risk when starting a new business.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The law of large numbers states that if ...
View Answer

Correct Answer
verified
The four ways of managing risk include 1...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified