Principles of Insurance Quiz

Political upheaval or government suddenly losing vote of confidence will be classified as which type of risk

• Dynamic Risk

• Static Risk

• Particular Risk

• Financial Risk

How are the risks measured

• The cost of actual loss

• The cost of consequential loss

• The likely loss that may occur if a peril strikes

• The likelihood of peril striking

How did the risk management formally evolve

• As a function of debt collectors

• As a function of investment organization

• As a function of business enterprise

• As a function of financial lending

The total of actual loss and consequential loss is known as the

• Minimum possible loss

• Maximum possible loss

• Probable maximum loss

• Maximum probable loss

Separation and duplication are examples of

• Hedging

• Consequential losses

• Financial Risk

• Loss reduction techniques

Probable Maximum Loss is determined using the

• The cost of implementing loss reduction techniques

• The probability of the peril striking

• maximum possible loss

• The cost of the actual loss

If the cost of damage is being met using internal resources or funds, how is the risk being managed

• Transfer

• Avoidance or prevention

• Retaining

• Reduction

Spreading risk across the areas which may not be affected equally or at the same time is called

• Duplication

• Transfer

• Separation

• Diversification

When a risk is retained, the implication is that the costs of damage caused will be

• Met with internal sources

• Met with external sources

• Left on the insurer

• Left with owner

Mental agony and loss of reputation are the examples of which category of risks

• Non-financial risk

• Static risk

• Financial Risk

• Speculative risk