Chapter 2 Activity

Front

Which of the following is NOT a risk management technique? Avoidance, Retention, Elimination, Loss Control

Back

Elimination

Front

What is the primary goal of risk avoidance?

Back

To completely eliminate risk

Front

A company decides to stop selling a high-risk product to avoid potential lawsuits. What risk technique is this?

Back

Avoidance

Front

A small business cannot afford insurance but decides to set aside funds for unexpected losses. What technique is used?

Back

Retention

Front

A factory installs fire sprinklers and conducts monthly safety drills to minimize fire hazards. What risk management technique is applied?

Back

Loss Control

Front

A construction company includes a ‘hold harmless’ clause in its contracts, shifting liability to subcontractors. What risk management method is used?

Back

Non-Insurance Transfer

Front

The number of heart attacks can be reduced if individuals control their weight, stop smoking and eat healthy diets. This is the example of loss

Back

prevention

Front

Risk avoidance should be used in those instances in which the exposure has catastrophic potential and the risk can be reduced or transferred.

Back

False

Front

The following are the benefits of risk management, EXCEPT: Pre-loss and post-loss objectives are attainable, Improve stakeholders' confidence, Decrease profits and revenues, Align with long-term business plans

Back

Decrease profits and revenues

Front

Risk financing refers to techniques that provide for funding of losses, EXCEPT

Back

Non-retention