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Insurance & Managing Risk Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. Which one of the following is NOT a step involved in risk management?

Question 2 2. Which one of the following is an example of environmental change related to the external political environment?

Question 3 3. Samantha is a CEO of a large marketing company. She is trying to determine what external factors may impact the business in the next few months. She is concerned about the 2018 midterm elections and has decided to invest money into a PAC of a pro-business independent candidate. Another cause for concern is the increasing number of complaints regarding her IT sector. Which of the following may impact her business, and how can she manage these factors?

Question 4 4. Which of the following is an example of an environmental change related to an economic factor?

Question 5 5. How does technological change affect risk management?

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Question 6 6. How is risk related to insurance?

Question 7 7. Zuk company Ltd. decides to launch a brand new type of bicycle called the Zukbike. The company accepts this risk and is prepared to pay for the losses that may occur. Which type of risk management approach is being used by the company?

Question 8 8. If a company purchases an insurance policy, which type of risk management approach is it using?

Question 9 9. Which of the following management decisions involves risk reduction?

Question 10 10. Which of the following is NOT a step in the risk management process?

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Question 11 11. An insurance company pays your auto accident claim and then turns around and sues the other driver for negligence in your name. The company wins an award and keeps the money. This is an illustration of which of the following?

Question 12 12. How is the Indemnity principle different from the Subrogation rights?

Question 13 13. Mary is in a car accident, and her car is completely destroyed. Her policy limit for damage to the car is $35,000. Her deductible is $1,000. The value of the car is $28,000. The insurance company is required to pay which amount?

Question 14 14. The proposition that a prediction based upon a sample of 10,000 occurrences is more accurate than a prediction based upon 100 occurrences is an illustration of the _____.

Question 15 15. How does insurance allow a person or business to manage risk?

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Question 16 16. What is the difference between general liability insurance and product liability insurance?

Question 17 17. A tornado swept through a city making it difficult for a small business to earn money for some time. What kind of insurance would help to minimize the loss of income?

Question 18 18. Which of the following statements is the best explanation of how insurance allows a company to manage risk?

Question 19 19. Companies get Key Person Insurance to cover against _____.

Question 20 20. Which one of the following types of insurance is usually required by law?

Insurance & Managing Risk Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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