WorksheetsChapter 12 - Risk Management
Total questions: 25
Worksheet time: 13mins
Credit card fraud is an example of:
artificial risk
natural risk
human risk
economic risk
Risk management is taking action to prevent or reduce the possibility of loss to your business.
true
false
Which of the following is NOT one of the basic strategies for dealing with risk?
avoid the risk
assume the risk
deny the risk exists
transfer the risk to another party
It is not possible for a business to avoid all risks.
true
false
Business owner's policies do not cover auto insurance, workers' compensation, or health and disability insurance.
true
false
A business owner should not let managers and employees know about the company's plan for handling risks, as that information is not really any of their concern.
true
false
The insurance agent who sells you the policy will be involved in processing your claim should you ever need to collect on your policy.
true
false
All of the following are steps that should be taken in a risk assessment EXCEPT:
assume that risks are not a threat to your business until you are faced with them
decide how certain risks would affect your business
prioritize risks by the impact they will have on your business
educate yourself about the risks common to your type of business
A machine called an electronic credit authorizer
calculates the credit worthiness of a potential customer
checks to see if a customer has enough money in his/her checking account to cover a purchase
checks to see if a customer's credit card is valid
generates a summary of a customer's credit report
Some businesses, such as restaurants and retail stores, are more vulnerable to employee theft than others.
true
false
It is against the law for a business to install a surveillance system to monitor employees.
true
false
Speculative risks are uninsurable.
true
false
Investing in the stock market is an example of a pure risk.
true
false
Because a business can gain more sales by extending credit to customers, there are no real risks involved in offering credit.
true
false
Human actions have no effect on:
pure risks
uncontrollable risks
speculative risks
controllable risks
A business probably could not buy insurance to cover risks associated with any of the following except:
economic conditions
destructive weather
consumer demand
competitors' actions
The expense for workers' compensation insurance is entirely the employee's responsibility.
true
false
If you do business in a foreign country, you will probably encounter problems that you have not faced in the United States.
true
false
What type of business insurance covers a company's legal responsibility for the harm it may cause to others as a result of what it and its employees do or fail to do in its business operations?
property insurance
life insurance
business interruption insurance
liability insurance
An insurance agent
earns a commission on the amount of coverage he/she sells to customers
may represent many different insurance companies
may work for a single insurance company
all of the above
Most credit cards are considered
unsecured loans
secured loans
installment loans
collateral loans
A business's credit policies need to specify all of the following except
what the terms of the credit will be
the age and race of the customers who will be offered credit
the creditworthiness of the customers who will be offered credit
what products may be purchased on credit
At closing, you cash register receipts totaled $3,328. The cash in the register equaled $2,395; the credit card slips accounted equaled $850. How much of the proceeds are not accounted for?
$3,245
$83
$933
$2,478
You have taken out a loan for $50,000 to start your business. As a condition of the loan, your bank requires you to carry property insurance for at least the amount of the loan. If annual insurance premiums are $25 per $1,000 of coverage, how much will you pay for insurance to satisfy your bank loan requirement?
$1,000
$25
$1,150
$1,250
You have determined that you can hire a security guard for your business for $40 per hour. If you hire a guard for 5 hours every day, how much will you spend on security over the course of one year?
$73,000
$65,000
$14,600
$1,825
