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—›
Insurance and Risk Management
Insurance and Risk Management MCQs
?
The Insurance is a ______________
Contract
Uncertainty
Peril
Hazard
?
Losses arising due to a risk exposure retained or assured is known as ______________
Risk Reduction
Risk Financing
Risk Retention
Risk Sharing
?
An alternative approach to the check list is ______________
Threat Analysis
Event Analysis
Operability Study
Minimum Level Analysis
?
The measures aimed at avoiding, eliminating or reducing the chances of loss production is covered by ______________
Risk Control
Risk Retention
Risk Avoidance
Risk Financing
?
Insurance is best suited to risk with ______________.
high frequency and low loss severity.
low frequency and high loss severity.
minimum frequency and no loss severity.
high frequency and high loss severity.
?
The risk manager maybe able to identify the new ventures involved in ______________.
Pure risk.
Group Risk.
Speculative risk.
Particular risk.
?
An instrument by which a pure risk is transferred by a party other than insurer is
Insurance
Retention.
Non Insurance Transfer.
Reinsurance.
?
The Person whose risk is insured is called ______________.
Insured
merchandiser
marketer
Agents
?
That which is designed to improve the information on which decisions are take to reduce risk is ______________.
Transfer
Research.
Costs.
Deflation.
?
Uncertain events are broadly classified as ______________.
Predictable and Unpredictable.
Possible and Impossible
Natural and Artificial.
Rare and Continuous
?
The possibility that actual results may differ from predicted results is known as ______________.
Risk.
Uncertainty.
Peril.
Hazards.
?
The success of whole process of risk management depends on its ______________.
Identification
Risk analysis
Assessment of risk
Evaluation of risk
?
That which covers the cost of self insurance, loading in insurance premiums and enforcing hedging arrangements is ______________.
Cost of Loss Financing
Cost of Control of loss
Cost of Residual Uncertainty
Cost of Internal Risk Reduction
?
If RMIS has poor system documentation then the remedy is to provide ______________.
solid vendor account team
internal access to system expert
assessment in proper manner
clear and comprehensive specifications
?
The risk management can be done by ______________.
Insurance
Hedging
Derivatives
All of the above
?
The installation of heat or smoke activated sprinkler systems that are designed to minimize fire damage in the outbreak of a fire is an example of ___...
Loss prevention
Loss reduction
Hedging
Insurance
?
______________ is the extra payment done for administrative and capital cost.
Premium
Premium loading
Interest
Contingency
?
Transfer of rights and remedies of the insured to the insurer after indemnity has been effected is called ______________.
Insurable interest
Subrogation
Proximate clause
Money back policy
?
The principle of indemnity is applicable to ______________ only.
Life Insurance
Personal accident insurance
Proximate Cause
Property insurance
?
______________ is those terms, which are implied in every contract of marine insurance unless they are expressly excluded.
Guarantee
Express Warranties
Implied Warranties
Waiver Clause
?
Risk Management is a subject which falls under ______________.
production
HR
marketing
finance
?
A person employed to do any act for another or to represent another in dealing with a third person refers to ______________.
Principal
Employee
Agent
Development Officer
?
Insurance contract is sort of contract which is approved by ______________.
The Indian Contract Act
Indian Factory Act
Indian Companies Act
The Indian finance Act
?
The term Assurance refers to ______________.
Life Insurance Business
Marine Insurance Business
Fire Insurance Business
Motor Vehicle Business
?
The first step in risk management process is ______________.
Risk avoidance
Risk Identification
Insurance
Risk Evaluation
?
Which of the following is the last step in the risk management process?
Insurance
Review
Risk evaluation
Loss prevention
?
Risk retention means ______________
Saving money to pay for the losses
Accepting and agreeing to finance the loss oneself
Not taking up any activity which is risky
Insuring the risk
?
The risk which has three outcomes with possibility of gain is ______________
Pure
Speculative
Static
Dynamic
?
The company doing the insurance business is called ______________.
Mutual funds
Non-banking firm
An insurance company
Banking company
?
The medias used for direct marketing are
Direct Mail
Telephone Contacts
Kiosks
All the above
?
Pure Risk was grouped ______________.
Property Risk
Personal Risk
Liability risk
All the above
?
A bancassurance started in India was ______________.
2002
2003
2001
2000
?
_____________ refers to distribution of insurance products through
Bank
Company
Co-operatives
Sole trader
?
Risk Management process includes ______________
Risk Analysis
Risk Control
Risk Analysis and Control
Risk Reduction
?
The foundation for risk Management is provided by ______________
Risk Control
Risk Analysis
Risk Identification
Risk Retention
?
Insurance is a risk management technique involving
Risk Retention
Risk Avoidance
Loss Control
Risk Transfer
?
Restoring a policy holder to his pre-loss financial position means ______________.
Contribution
Indemnity
Goodwill
Liquid Asset
?
______________ are the risk management methods
Insurance
Hedging
Derivatives
All the above
?
The strategy pursued by the business firms to tackle risk by spreading into a number of business is ______________.
Diversification
Centralization
Risk Retention
Financing
?
A firm may seek to minimize marketing risks by undertaking ______________.
Credit Facilities
Training Salesmen
Market Research
Branch Expansion
?
The principles of indemnity does not apply to ______________.
Burglary insurance
Fire insurance
Marine insurance
Life and Personal Accident insurance
?
The risk that arises because of magnitude of cash flow due to change in output and input prices is known as ______________.
Credit risk
Particular risk
Business risk
Price risk
?
Cost of risk has the following components ______________.
Cost of Expected Losses and Cost of Control of Loss
Cost of Expected Losses and Cost of Loss Financing
Cost of Control of Loss and Cost of Loss Financing
Cost of Expected Loss, Cost of Control of Loss Cost of Financing, Cost of Residual Uncertainty
?
If RMIS has the problem of incompatibility of software then the remedy is to provide ______________.
solid vendor account team
internal access to system expert
clear and comprehensive specifications
financial check
?
To avoid RMIS being obsolete provide ______________.
solid vendor account team
internal access to system expert
standard software configuration
clear and comprehensive specifications
?
The process of reducing the level of risky activities firstly affect the frequency of losses is the strategy of ______________.
Risk avoidance
Retention
Hedging
Other contractual risk transfer
?
Which of the statements is correct? a. Insurance is a transfer of risk mechanism. b. Insurance gives physical protection to assets.
Statement A
Statement B
Both the statements
Neither of the statements
?
A complete proposal form contains information about ______________.
Moral hazard
Physical hazard
Personal history of proposer and identify of the property insurance
All of the above
?
This policy covers all risks to the ship and its cargo while the ship is at a particular port ______________.
Voyage policy
Floating policy
Time policy
Portrisk Policy
?
_______________ policy matures on the assured death or on his attainment of a particular age whichever occurs earlier.
Endowment
Money back
Joint life
Single premium
?
Assignment of life policy means ______________.
Transferring rights to the assignee
Policy holder is entitled to the paid up value
Paid up value is always higher than surrender value
Value payable on assured death or maturity
?
Risk insured against death is a contract of ______________.
Assurance
Agreement
Indemnity
Caveat Emptor
?
The risk which arises because of change in major economic, social, cultural and political factors are ______________.
Particular Risk
Fundamental Risk
Speculative Risk
Dynamic Risk
?
When an event is stated to be possible, it has a probability between ______________.
Zero and One
Zero or One
None of these
Both of the above
?
If the premium loading is zero then purchasing insurance ______________
does not change the persons expected wealth
changes the persons expected wealth
increases the variability of wealth
no change in expected wealth
?
Insurance cover ______________.
Protect assets
Prevents loss
Reduces the impact of loss
Insurances immortality
?
Taylor Tobacco Company is concerned that the company may be held liable in a court of law and forced to pay a large damage award. The characteristics ...
moral hazard
particular risk
speculative risk
legal hazard
?
Bancassurance means ______________.
Selling financial services
general liability insurance
Selling banking products
Selling Insurance Products
?
Credit Risk is high in case of ______________.
Companies
Partnership
Financial Institutions
None of these
?
A bancassurance concept originated in ______________.
England
Finland
France
Spain
?
The cause of loss or a contingency that may cause a loss due to nature is known as ______________
Hazard
Peril
Risk
Uncertainty
?
The risk which directly affects the individual’s capability to earn income is called ______________
Personal Risk
Risk Financing
Risk Retention
Risk Sharing
?
Type of Risk Management are ______________
Risk Retention, Risk Analysis, Risk Financing
Risk Analysis, Risk Control, Risk Financing
Risk Control,Risk Retention,Risk Avoidance
Risk Analysis, Risk Control, Risk Financing
?
The Risks which have some financial impact from the part of risk management are ______________
Dynamic and Speculative Risk
Pure and Speculative Risk
Pure and Static Risk
Personal and Static Risk
?
Identification of sources of hazard will have to be done by the ______________.
Production manager
Risk manager
Finance manager
General manager
?
The expected value of losses varies directly with the ______________.
time period
financial period
fixed period
fluctuating period
?
The number of elements of uncertainty in most type of events are ______________.
Three
Two
One
Five
?
Personnel risk in a firm depends upon the ability integrity and enthusiasm of ______________.
Creditors
Debtors
Government
Management and Employees
?
Except life assurance the maximum term of other insurance is ______________.
twelve months
twenty four months
six months
thirty six months
?
The situation of doubt in mind about the happening or not happening of anything in future because of lack of knowledge ______________.
Risk
Uncertainty
Loss
Hazards
?
Transfer of risk to other party is done through ______________.
Reduction
Control
Retention
Insurance
?
The cost of uncertainty that remains once the firm has selected and implemented loss control loss financing and internal risk reduction is called ____...
Cost of Residual Uncertainty
Cost of Expected Losses
Cost of Price Change
Cost of Loss Control
?
If RMIS shows lack of service then you need to provide ______________.
reference checks including on site
assessment in proper manner
financial check
standard software configuration
?
The methods of risk management are ______________.
Loss Control
Loss Financing
Internal Risk Reduction
All of the above
?
Which of the following helps in risk improvement?
Fire brigade
Salvage corps
Engineers who survey property to be insured
Ambulance
?
The insurance plays a role in the economic development of the country in the following ways ______________.
Releases capital for new investments
The job potential increases
Money collected is invested in infrastructure
All of the above
?
Malhotra Committee was appointed in
1993
1994
1999
2000
?
Fire insurance can be taken in respect of ______________
movable property only
immovable property only
both movable and immovable properties
persons only
?
______________ is an agreement where by the insurer agrees to indemnity the insured against marine losses.
Life insurance
Fire insurance
Marine insurance
Public liability insurance
?
When the subject matter insured is destroyed wholly refers to ______________.
Partial loss
Actual total loss
Constructive total loss
Maximum loss
?
Marine perils is also called as ______________.
Perils of the Sea
Moral Hazards
Marine Clause
Marine laws
?
______________ is a document which provides evidence of the contract of insurance
Proposal form
Policy form
Cover note
Certificate of insurance
?
The business of insurance is related to protection of ______________.
Savings
Status
Profits
Economic value of assets
?
Loss control involves a combination of ______________.
effort and time
fund and time
funds effort or time
effort and fund
?
An insurance company estimates its objective risk for 10,000 exposures at 10 Per cent. Assuming the probability of loss remains the same, what would h...
It would decrease to 1 percent
It would decrease to 5 percent
It would remain the same
It would increase to 20 percent
?
All of the following are social costs associated with insurance Except ______________.
increased cost of capital
the expense of doing business
fraudulent claims
inflated claims
?
Risk of premature death is a ______________.
Financial Risk
Dynamic Risk
Subjective Risk
Personal Risk
?
All dynamic risks are ______________.
predictable
Unpredictable
Possibility
Judgement
?
The agreement refers to ______________.
Offer
Acceptance
Free Consent
All the above
?
The System that brings together the operative causes of perils is ______________
Risk Evaluation
Safety Audit
Risk Financing
Fault Tree Analysis
?
The main aim of risk Financing is to ______________
Control the risk
Avoid the Risk
Spread the Risk
Financing the Risk
?
The claim amount received from insurer are treated as ______________.
Nontaxable Income
Taxable Gain
Gains
Reserve
?
Franchise and aggregate excess of loss are two variations of ______________.
Coinsurance
Excess of Loss
First Loss
Proximate Cause
?
The risk management which refers to the identification of pure risk faced by an individual or family is ______________.
Corporate
Individual
Joint Stock Companies
Partnership Firm
?
The 5th chapter of Factories Act deals with ______________.
Safety
Welfare
The Inspecting Staff
Marketing Manager
?
Dynamic risks are closely related to ______________.
Speculative risks
Static Risks
Personal Risks
Particular
?
In order to minimize the impact of uncertain events risk management is concerned with planning arranging and controlling of ______________.
Men and Material
Resources and Market
Activities and Resources
Men and Activities
?
The number of prime elements of risk analysis is ______________.
one
Two
Three
Four
?
The identification analysis and economic control of those risk which can threaten the assets or earning capacity of an enterprise is known as ________...
Business Management
Risk Management
Financial Management
Strategic Management
?
The uncertainty reduced through diversification and investing in information is known as ______________.
Cost of Residual Uncertainty
Cost of Loss Financing
Cost of Loss Control
Cost of Internal Risk Reduction