FP2 - 2.01 Practice

What is the main topic discussed in the video introduction?

• Banking

• Insurance

• Investments

• Real Estate

Insurance helps us maintain ______ of mind knowing that even if something bad happens, someone else is going to pay for what it costs to fix it.

• peace

• chaos

• confusion

• stress

Insurance involves a company offering a ______ for a certain risk.

• loan

• guarantee

• payment

• discount

What is the main way insurance companies make money?

• By spreading risk among many people

• By increasing the probability of risk

• By reducing the number of insured people

• By charging high premiums.

Insurance companies calculate how much money they need to bring in to turn a profit on a given risk with a given ______.

• income

• probability

• number of people

• premium

Why do most insurance companies specialize in their own kind of insurance?

• To reduce competition

• To develop complex models for profit

• To offer the same insurance as others

• To avoid risk.

Fill in the blank: If you estimated that 1 in 100 houses burned down each year but it was actually 5 in 100, then you'd be ______.

• A) Profiting

• B) Breaking even

• C) Losing money

• D) Gaining customers

Which of the following is NOT a type of insurance mentioned in the text?

• Auto

• Health

• Life

• Travel

Fill in the blank: Some insurance policies, like ______ insurance, are legally required to be held.

• Health

• Auto

• Life

• Home

What is the risk if you save $200 a month for a year instead of getting home insurance?

• You will have $2400 extra at the end of the year.

• You will be exposed to the risk of losing a few hundred thousand dollars if your house burns down.

• You will have to pay more taxes.

• You will have to pay a higher insurance premium next year.