WorksheetsQuiz - Chapter 1 INS200
Total questions: 12
Worksheet time: 13mins
Name
Class
Date
1.
What is the definition of risk in insurance terms?
a)
A condition with no possible deviation from expected outcomes
b)
A variation of outcomes in a given situation
c)
Certainty about a positive outcome
d)
An assurance of financial gain
2.
The three major types of hazards are physical hazard, moral hazard, and (a) hazard.
3.
Which type of hazard is associated with a physical condition that increases the chance of loss?
a)
Moral hazard
b)
Physical hazard
c)
Morale hazard
d)
Legal hazard
4.
What is a moral hazard in insurance terms?
a)
A physical condition increasing loss chance
b)
Indifference due to insurance coverage
c)
Character defect increasing loss chance
d)
Intentional damage to property
5.
Which of the following best describes 'Fundamental Risk'?
a)
A risk that affects a single individual
b)
A risk that affects the entire economy or a large number of people
c)
A risk that involves speculative gains
d)
A risk that cannot be insured
6.
Which type of probability theory uses historical data to estimate loss?
a)
A Priori Probability
b)
Judgmental Probability
c)
Empirical Probability
d)
Speculative Probability
7.
What type of risk can result in both profit and loss?
a)
Pure Risk
b)
Speculative Risk
c)
Fundamental Risk
d)
Particular Risk
8.
A (a) hazard is caused by carelessness or indifference to loss because of having insurance coverage.
9.
The probability theory that relies on human judgment in the absence of sufficient data is known as (a) probability.
10.
A (a) risk affects the entire economy or large groups of people rather than an individual.
11.
Explain the difference between pure risk and speculative risk.
4 lines
12.
Analyze how probability theories help insurance companies in estimating potential losses.
4 lines
100 %
