Intro to Business: Chapter 14 Review

With careful planning, it is possible to avoid all risk.

• True
• False

When you invest money in the stock market, you are taking a pure risk.

• True
• False

If a risk is uncommon or it is impossible to predict the amount of loss that could be suffered, it is termed uninsurable risk.

• True
• False

If a business transfers a risk, that means that no one assumes the risk; it is simply eliminated.

• True
• False

The person or company buying an insurance policy is called the insured.

• True
• False

Businesses cannot insure many of the risks they face.

• True
• False

A risk that involves a possible injury to your health would be classified as a 

• property risk
• liability risk
• personal risk
• non-economic risk

A pure risk

• offers no opportunity for gain
• is uncontrollable
• is uninsurable
• all of the above are true

Which of the following is a controllable risk?

• a sudden hailstorm
• loss from theft
• a lightning strike
• a flash flood

If you choose not to complete a risky activity, you are said to be __ the risk.

• avoiding
• transferring
• assuming
• exiting