bussiness, insurance MCQ with answer
1. An insurance company will:
a. Insure speculative and pure risks
b. Insure pure risk, but not speculative risk
c. Insure neither pure risk nor speculative risk
d. Insure speculative risk, but not pure risk
e. Insure all types of risks
Answer: Insure pure risk, but not speculative risk
2. An individual who purchases insurance is:
a. The insurance company
b. A policyholder
c. An insurer
d. A victim
e. An employer
Answer: A policyholder
3. An insurance program:
a. Should be constant through one's life
b. Should change along with needs and goals
c. Should minimize personal property and liability risks
d. A and C are correct
e. B and C are correct
Answer: B and C are correct
4. What is the fee that a policyholder pays when an insurance company agrees to take on the risk?
a. Coverage
b. Insured
c. Premium
d. Peril
e. Risk
Answer: Premium
5. Insurance allows someone to:
a. Reduce risk
b. Assume risk
c. Shift risk
d. Avoid risk
e. Eliminate risk
Answer: Shift risk
6. Barbara left a skateboard on her front steps. Her neighbor then tripped on the skateboard and was injured. The skateboard is a:
a. Hazard
b. Negligence
c. Peril
d. Premium
e. Risk
Answer: Hazard
7. Barbara left a skateboard on her front steps. Her neighbor then tripped on the skateboard and was injured. The fact that she didn't put away the skateboard is called:
a. Hazard
b. Negligence
c. Peril
d. Premium
e. Risk
Answer: Negligence
8. Which of the following questions should one ask when developing a risk management plan?
a. What do I need to insure?
b. How much should I insure something for?
c. What kind of insurance should I buy?
d. Who should I buy insurance from?
e. All of the questions should be asked when developing a risk management plan
Answer: all of the questions should be asked when developing a risk management plan
9. The two basic types of risk that people face regarding their personal property are:
a. Basic and criminal
b. Physical damage and destruction
c. Destruction and basic
d. Physical damage and damage caused by criminal behavior
e. Negligence and criminal behavior
Answer: physical damage and damage caused by criminal behavior