Ch 14: Risk Management

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 not common or if it is impossible to predict the amount of loss that could be suffered, it is termed an 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 insurer.

• True

• False

With group insurance, a large number of employees and their family members are covered under one policy.

• True

• False

Vehicle insurance pays medical costs for those injured if people driving the company’s vehicles cause an accident.

• True

• False

Businesses cannot insure many of the risks they face.

• True

• False

When an organization broadens its product line, business risks are reduced because lower-than-expected sales of one item will not result in a complete failure for the company.

• True

• False

It is usually a huge risk for a company to employ locals when it expands into the international marketplace.

• True

• False