Insurance and Risk Management Quiz

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

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

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.

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

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

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

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.

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

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

• liability risk

• property risk

• noneconomic risk

• personal risk

Which of the following is a controllable risk?

• loss from theft

• a lightning strike

• a sudden hailstorm

• a flash flood