Quiz on Insurance in International Business

Which of the following is NOT a risk that insurance helps manage in international business?

• Damage to goods during cross-border shipping

• Fluctuations in foreign exchange rates

• Political unrest affecting trade activities

• New product development challenges

Why do banks often require insurance when providing trade finance to businesses?

• To lower the interest applied on export finance loans

• To ensure trust and reduce potential financial losses

• To increase the revenue of financial service providers

• To simplify currency conversion for international trade

Which of the following best explains why insurance helps businesses expand globally?

• It covers advertising expenses for foreign markets entry

• It minimizes risks that discourage cross-border operations

• It reduces tariffs on imported raw materials

• It allows easier payment of customs-related fees

How does insurance encourage foreign investment in emerging markets?

• By ensuring higher returns on international investment projects

• By covering investors against political and regulatory uncertainties

• By reducing costs related to foreign transportation logistics

• By allowing simplified customs clearance procedures abroad

Which of the following best illustrates the characteristic of “risk transfer” in insurance?

• The policyholder bears all financial costs when a loss occurs.

• The insurance company agrees to take on financial responsibility on behalf of the insured when a risk materializes.

• Risk is equally distributed among all customers without a contract.

• The policyholder chooses the compensation amount based on personal preference.

Which of the following characteristics allows insurance to spread the cost of losses across many individuals so that no single person has to bear the entire financial burden alone?

• Indemnification

• Pooling of losses

• Risk transfer

• Fortuitous loss

What was the main reason the Vietnamese textile exporter was able to recover the value of the damaged cargo in the 2021 case study?

• The ship returned to Vietnam safely

• The goods were covered by a valid marine insurance policy

• The exporter received a loan from the bank

• The buyer in Germany agreed to pay compensation

Which of the following documents is not typically required to support a marine insurance claim?

• Original insurance policy

• Commercial invoices

• Weather forecast for the day of shipment

• Survey report indicating the damage

What does the Principle of Indemnity mean?

• The insured can earn extra money from a loss

• The insurer pays more than the actual loss

• The insured should not make a profit from a loss

• The insurer does not pay for any loss

What do you think about Ms. Giang?

• Smart, inspiring, dedicated, confident, thoughtful

• Kind, patient, supportive, gentle, understanding

• Talented, creative, enthusiastic, energetic, brilliant

• Professional, passionate, caring, hardworking, friendly