Risk Management and Insurance Quiz

Break down the two steps in the risk management process: (a)   .

• Identify risks and mitigate risks
• Identify risks and monitor risks
• Assess risks and control risks
• Identify risks and control risks

Risk Transfer is-

• Sharing the financial consequences of a risk with another party
• Ignoring the financial consequences of a risk
• Doubling the financial consequences of a risk
• Shifting the financial consequences of a risk to another party

What is an insurance policy?

• An insurance policy is a type of loan agreement
• An insurance policy is a legal document for renting a property
• An insurance policy is a medical prescription for treatment
• An insurance policy is a contract between you and your insurance company

Insurance is-

• a type of fruit
• a form of transportation
• a risk management tool
• a cooking utensil

The policyholder pays premiums to the insurer in exchange for financial compensation in the event of a covered incident.

• Warranty
• Investment
• Savings
• Insurance

Risk Retention is-

• Retaining a portion of the risk by the insurer
• Avoiding risk altogether
• Sharing risk equally among all parties
• Transferring all risk to the insured

Risk Reduction is-

• Maximizing the impact of potential risks through various strategies.
• Ignoring potential risks and hoping for the best.
• Minimizing the impact of potential risks through various strategies.
• Avoiding all risks completely.

1. What is risk management?

• Risk management is the process of ignoring risks
• Risk management is the process of maximizing risks
• Risk management is the process of avoiding all risks
• The process of identifying, assessing and controlling threats to an organization's capital, earnings and operation

Describe the purpose of insurance.

• To provide financial protection against losses.

• To offer services for health and wellness.

• To invest money for future returns.

• To facilitate international trade.

What is the Law of Large Numbers?

• The Law of Large Numbers states that the more trials conducted, the less accurate the experimental probability becomes.
• The Law of Large Numbers guarantees that the theoretical probability will always match the experimental probability.
• The Law of Large Numbers only applies to a small number of trials.
• The Law of Large Numbers is when a company's growth rate declines as it continues to expand