Chapter 14 Test - Principles of Business 1/4

Indicate whether the statement is true or false. 1. The person or company buying an insurance policy is called the insurer.

• True

• False

Indicate whether the statement is true or false. 2. When you invest money in the stock market, you are taking a pure risk.

• True

• False

Indicate whether the statement is true or false. 3. Businesses cannot insure many of the risks they face.

• True

• False

Indicate whether the statement is true or false. 4. With group insurance, a large number of employees and their family members are covered under one policy.

• True

• False

Indicate whether the statement is true or false. 5. If a business transfers a risk, that means that no one assumes the risk; it is simply eliminated.

• True

• False

Indicate whether the statement is true or false.

• True

• False

Indicate whether the statement is true or false. 7. 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.

• True

• False

Indicate whether the statement is true or false.

• True

• False

Indicate whether the statement is true or false. 9. Vehicle insurance pays medical costs for those injured if people driving the company’s vehicles cause an accident.

• True

• False

Indicate whether the statement is true or false. 10. It is usually a huge risk for a company to employ locals when it expands into the international marketplace.

• True

• False