Which of the following best defines risk?

• The probability of gaining a profit

• The possibility of loss or uncertainty about outcomes

• The assurance of loss occurrence

• The ability to predict future events

A peril can best be described as:

• Anything that increases the chance of loss

• The direct cause of loss

• A moral defect in an individual

• A measurable financial outcome

A faulty wiring system in a building is an example of a:

• Morale hazard

• Moral hazard

• Physical hazard

• Psychological hazard

Which of the following is a type of pure risk?

• Investment in shares

• Risk of unemployment

• Speculation on gold price

• Currency exchange risk

Which type of probability relies on historical data and the law of large numbers?

• A priori probability

• Empirical probability

• Judgmental probability

• Theoretical probability

Which of the following statements best describes risk management?

• A random process of dealing with uncertainty

• A systematic approach to identifying, measuring, and controlling risk

• A method of increasing business profits

• A process of avoiding all possible risks

From an Islamic perspective, risk management should:

• Focus solely on profit maximization

• Ignore external uncertainty

• Align goals with Shariah principles

• Encourage speculative activities

One of the objectives of risk management is to:

• Increase speculative investment

• Protect the organization from major financial losses

• Eliminate all business risks

• Maximize debt exposure

The frequency of loss in risk evaluation refers to:

• The monetary value of the loss

• The number of times loss occurs

• The emotional impact of loss

• The severity of financial impact

Which of the following is an example of risk control technique?

• Retention

• Self-insurance

• Insurance

• Loss prevention