Insurance and Risk Management

11. The possibility that actual results may differ from predicted results is known as ______________.

  1. Risk.
  2. Uncertainty.
  3. Peril.
  4. Hazards.
Correct answer: (A)

12. The success of whole process of risk management depends on its ______________.

  1. Identification
  2. Risk analysis
  3. Assessment of risk
  4. Evaluation of risk
Correct answer: (A)

13. That which covers the cost of self insurance, loading in insurance premiums and enforcing hedging arrangements is ______________.

  1. Cost of Loss Financing
  2. Cost of Control of loss
  3. Cost of Residual Uncertainty
  4. Cost of Internal Risk Reduction
Correct answer: (A)
Cost of Loss Financing

14. If RMIS has poor system documentation then the remedy is to provide ______________.

  1. solid vendor account team
  2. internal access to system expert
  3. assessment in proper manner
  4. clear and comprehensive specifications
Correct answer: (C)
assessment in proper manner

15. The risk management can be done by ______________.

  1. Insurance
  2. Hedging
  3. Derivatives
  4. All of the above
Correct answer: (D)
All of the above

16. 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 ______________.

  1. Loss prevention
  2. Loss reduction
  3. Hedging
  4. Insurance
Correct answer: (B)
Loss reduction

17. ______________ is the extra payment done for administrative and capital cost.

  1. Premium
  2. Premium loading
  3. Interest
  4. Contingency
Correct answer: (B)
Premium loading

18. Transfer of rights and remedies of the insured to the insurer after indemnity has been effected is called ______________.

  1. Insurable interest
  2. Subrogation
  3. Proximate clause
  4. Money back policy
Correct answer: (B)

19. The principle of indemnity is applicable to ______________ only.

  1. Life Insurance
  2. Personal accident insurance
  3. Proximate Cause
  4. Property insurance
Correct answer: (D)
Property insurance

20. ______________ is those terms, which are implied in every contract of marine insurance unless they are expressly excluded.

  1. Guarantee
  2. Express Warranties
  3. Implied Warranties
  4. Waiver Clause
Correct answer: (C)
Implied Warranties
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