QTRR-Chuong 1-English

Traditionally, risk has been defined as:

• any situation in which the probability of loss is one

• any situation in which the probability of loss is zero.

• uncertainty concerning the occurrence of loss

• the probability of a loss occurring.

A peril is

• a moral hazard.

• the cause of a loss.

• a condition which increases the chance of a loss.

• the probability that a loss will occur.

An earthquake is an example of a

• moral hazard.

• peril.

• physical hazard.

• objective risk.

Carelessness or indifference to a loss is an example of

• physical hazard.

• objective probability.

• moral hazard.

• attitudinal hazard.

Some characteristics of the judicial system and regulatory environment increase the frequency and severity of loss. This hazard is called

• moral hazard.

• physical hazard.

• attitudinal hazard.

• legal hazard.

A phrase that encompasses all of the major risks faced by a business firm is:

• financial risk.

• speculative risk.

• enterprise risk.

• pure risk.

Enterprise risk does not include financial risk.

• True

• False

The extra expense incurred by a business to stay in operation following a fire is an example of a(n)

• fundamental risk.

• speculative risk.

• direct loss.

• indirect loss.

Which of the following are often consequences of long-term disability?

1/ Continuing medical expenses

2/ Loss or reduction of employee benefits

• 1 only

• 2 only

• both 1 and 2

• neither 1 nor 2