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WorksheetsCh 14: Risk Management
Total questions: 43
Worksheet time: 28mins
With careful planning, it is possible to avoid all risk.
True
False
When you invest money in the stock market, you are taking a pure risk.
True
False
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
If a business transfers a risk, that means that no one assumes the risk; it is simply eliminated.
True
False
The person or company buying an insurance policy is called the insurer.
True
False
With group insurance, a large number of employees and their family members are covered under one policy.
True
False
Vehicle insurance pays medical costs for those injured if people driving the company’s vehicles cause an accident.
True
False
Businesses cannot insure many of the risks they face.
True
False
When an organization broadens its product line, business risks are reduced because lower-than-expected sales of one item will not result in a complete failure for the company.
True
False
It is usually a huge risk for a company to employ locals when it expands into the international marketplace.
True
False
A risk that involves a possible injury to your health would be classified as a
property risk.
liability risk.
noneconomic risk.
personal risk.
A pure risk
offers no opportunity for gain.
is uncontrollable.
is uninsurable.
all of the above are true.
Which of the following is a controllable risk?
loss from theft
a lightning strike
a sudden hailstorm
a flash flood
If you choose not to complete a risky activity, you are said to be ___the risk.
assuming
transferring
respecting
avoiding
A business can transfer the risk of product damage by
delivering a product itself.
using other channel members to store and distribute products.
simply deciding to do nothing because a problem is very unlikely to occur.
all of the above.
An insurance policy states the conditions to which
the insurer and the insured have agreed.
the insurance company and the policyholder have agreed.
the insurance company and the insurer have agreed.
the policyholder and the insurer have agreed.
The person or business for which an insurance company assumes the risk is called the
policyholder.
insured.
insurer.
claimant.
The amount a policyholder must pay for insurance coverage is a
premium.
deductible.
ransom.
claim.
Independent insurance agents
can charge policyholders whatever they want for premiums.
work only for businesses, not individuals, and therefore have special expertise in business-related insurance needs.
work for a large insurance company and sell only policies written by that company.
usually sell many kinds of policies from a number of different companies.
This type of insurance protects against losses from injury to people or property resulting from the products, services, or actions of a business.
liability insurance
health insurance
.
life insurance
all of the aboveall of the above
The three major categories of business insurance are
customers, employees, and vendors.
personnel, property, and operations.
technology changes, consumer demand, and economic conditions.
personnel, property, and economic conditions.
Which of the following pays the amount of an insurance policy upon the death of the insured?
health insurance
workers’ compensation
disability insurance
life insurance
A system of insurance set up by state law that pays employees who are injured on the job is called
workers’ compensation.
group insurance.
liability insurance.
retirement insurance.
Business interruption insurance
covers property losses resulting from fire, storms, accidents, theft, and vandalism.
provides compensation for ongoing business expenses that occur if a business has a temporary shutdown due to a fire, flood, or other major problem
insures the lives of key executives because of their importance to the company’s success.
compensates business owners in the event of a bankruptcy or business failure
Which of the following risks faced by businesses are often uninsurable?
economic conditions
consumer demand
competitors’ actions
all of the above
Which of the following would be a POOR way for a business to manage uninsurable risks?
The business should take an active role in its local community.
The business should be very careful about who it hires.
Managers should be aware of changes in the economy and competitors’ actions.
Executives must not reveal to employees that certain aspects of business operations are not fully insured.
To reduce international business risk, a business should
offer only a small number of products.
involve local business partners and employ local management.
carry out business in only a few countries.
all of the above are true
hich of the following is NOT an example of intellectual property?
books
movies
music
stereos
The exclusive right of an inventor to make, sell, and use a product or process is called a
patent.
copyright.
claim.
trademark.
The illegal use of intellectual property, patents, trademarks, and copyrights is known as
counterfeiting.
forging.
hacking.
phishing.
Risk can be thought of as the possibility of incurring a(n)_.
(a)
risk offers the chance either to gain or to lose
(a)
risks may result in inconvenience or embarrassment but do not have a financial impact.
(a)
A risk that cannot be reduced by your actions is called a(n) (a) risk
exchanges the uncertainty of a possible large financial loss for a certain smaller payment.
(a)
When you (a) a risk, you complete a risky activity with full responsibility.
A(n) (a) is a policyholder’s request for payment for a loss that an insurance policy covers.
The amount a policyholder pays for insurance coverage is called a(n) (a) .
The person who represents an insurance company and sells policies to individuals and businesses is an insurance (a) .
insurance provides payments to employees who are not able to work for an extended period due to serous illness or injury.
(a)
Life insurance payments are made to people named in the policy known as
(a)
Businesses buy (a) property insurance to cover property losses from events such as floods, fire, and earthquakes.
property refers to technical knowledge or creative work.
(a)
