Amit Bhatia

Question 1

1. ___________ is known as the cause of Loss.

A) Accident
B) Peril
C) Hazard
D) Risk
E) None of the above

Answer 1

B) Peril

Question 2

2. Which of the following is not an example of a Peril :
   a) Fire
   b) Theft
   c) Car
   d) Lightning
   e) Flood

Answer 2

c) Car

Question 3

3.________ is known as the cause of loss / damage;
and _______ is known as the chance of loss / damage.
a) Peril ; Hazard
b) Risk ; Peril
c) Hazard ; Risk
d) Peril ; Risk
e) Risk ; Speculation

Answer 3

d) Peril ; Risk

Question 4

4. Risks are the likelihood of loss or damage resulting from the occurrences of :
   a) Hazards
   b) Perils
   c) Accidents
   d) Both a and b
   e) Both a & c

Answer 4

d) Both a and b

Question 5

5. Risk is the degree of ________________ of a loss / damage :
   a) Certainty
   b) Uncertainty
   c) Measurability
   d) Probability
   e) Possibility

Answer 5

d) Probability

Question 6

6. Risk can be :
   a) Identified
   b) Measured
   c) Controlled
   d) Financed
   e) All of the above

Answer 6

e) All of the above

Question 7

7. Insurance covers only those \_\_\_\_\_ where, 
the possibility of occurrence is \_\_\_\_\_\_
a) Perils , Certain
b) Risks , Uncertain
c) Perils , Uncertain
d) Hazards , Certain
e) Risks , Certain

Answer 7

b) Risks , Uncertain

Question 8

8. _______ risks are more predictable and _______ risks are considered as the most insurable risks :
   a) Static and Pure
   b) Dynamic and Static
   c) Fundamental and Important
   d) Pure and Dynamic
   e) Catastrophic and Financial

Answer 8

a) Static and Pure

Question 9

9. Risk is known as the chance of loss. 
Choose the risk in which there is a chance of loss as well as a chance of gain.
a) Business risk
b) Speculative risk
c) Financial risk
d) Dynamic risk
e) Important risk

Answer 9

b) Speculative risk

Question 10

10. _________ is something that can cause Harm and
    is also known as “ the accelerator of a Peril ”.
    a) Risk
    b) Enemy
    c) Accident
    d) Loss
    e) Hazard

Answer 10

e) Hazard

Question 11

11. Choose the correct option in light of the statements given below :
    a) Physical hazard refers to the characteristics and qualities of the subject matter which is proposed to be insured.
    b) Moral hazard refers to the character of the person who is approaching the insurance company for insurance.
    c) Only a
    d) Only b
    e) Both a and b

Answer 11

e) Both a and b

Question 12

12. Which one of the following Hazard is the most difficult to assess and also needs past history of the proposer :
    a) Moral Hazard
    b) Physical Hazard
    c) Morale Hazard
    d) Moral & Morale Hazard
    e) Morale & Physical Hazard.

Answer 12

d) Moral & Morale Hazard

Question 13

13. The purpose of risk management is :
    a) To identify risks
    b) To eliminate risks
    c) To reduce risks
    d) All of the above

Answer 13

d) All of the above

Question 14

14. Risk Financing techniques try to make good the losses. Which among the following comes under Risk Financing :
A) Transfer
B) Retention
C) Reduction
D) Both A & C
E) Both A & B.

Answer 14

E) Both A & B

Question 15

15. The formula of Maximum Probable Loss (MPL) is the same as the :
A) Total Loss
B) Actual Total Loss
C) Active Total Loss
D) Constructive Total Loss
E) Total Actual Loss

Answer 15

A) Total Loss

Question 16

16. The four ways to manage risks include all of the following, except:
A) Risk Identification
B) Risk Avoidance
C) Risk Reduction
D) Risk Retention
E) Risk Transfer

Answer 16

A) Risk Identification

Question 17

17. Excess Clause in insurance is an example of :
A) Risk reduction
B) Risk retention
C) Risk control
D) Risk transfer
E) All of the above

Answer 17

B) Risk retention

Question 18

18. A technical term used to describe spreading of risk among different avenues is known as :
A) Value investing
B) Hedging
C) Risk spread ratio
D) Risk transfer
E) None of the above

Answer 18

B) Hedging

Question 19

19. Which of the following comes under risk transfer techniques :
    A) Buying insurance policies
    B) Using derivatives as a hedge against financial risks
    C) Outsourcing of business transactions
    D) Using indemnity agreements
    E) All of the above.

Answer 19

E) All of the above

Question 20

20. An individual can manage the risk associated to
    his / her life by _____ of risk by buying a _____ plan.

A) Transfer ; Motor insurance
B) Retention ; Personal accident
C) Reduction ; Health insurance
D) Transfer ; Life insurance
E) Controlling ; Financial

Answer 20

D) Transfer ; Life insurance