Insurance and Risk Management Online MCQ Set 1

QN01. The Insurance is a ______________

  1. Contract
  2. Uncertainty
  3. Peril
  4. Hazard
Answer

(A)Contract

QN02. Losses arising due to a risk exposure retained or assured is known as ______________

  1. Risk Reduction
  2. Risk Financing
  3. Risk Retention
  4. Risk Sharing
Answer

(C)Risk Retention

QN03. An alternative approach to the check list is ______________

  1. Threat Analysis
  2. Event Analysis
  3. Operability Study
  4. Minimum Level Analysis
Answer

(A)Threat Analysis

QN04. The measures aimed at avoiding,eliminating or reducing the chances of loss production is covered by ______________

  1. Risk Control
  2. Risk Retention
  3. Risk Avoidance
  4. Risk Financing
Answer

(A)Risk Control

QN05. Insurance is best suited to risk with ______________.

  1. high frequency and low loss severity.
  2. low frequency and high loss severity.
  3. minimum frequency and no loss severity.
  4. high frequency and high loss severity.
Answer

(B)low frequency and high loss severity.

QN06. The risk manager maybe able to identify the new ventures involved in ______________.

  1. Pure risk.
  2. Group Risk.
  3. Speculative risk.
  4. Particular risk.
Answer

(A)Pure risk.

QN07. An instrument by which a pure risk is transferred by a party other than insurer is

  1. Insurance
  2. Retention.
  3. Non Insurance Transfer.
  4. Reinsurance.
Answer

(C)Non Insurance Transfer.

QN08. The Person whose risk is insured is called ______________.

  1. Insured
  2. merchandiser
  3. marketer
  4. Agents
Answer

(A)Insured

QN09. That which is designed to improve the information on which decisions are take to reduce risk is ______________.

  1. Transfer
  2. Research.
  3. Costs.
  4. Deflation.
Answer

(B)Research.

QN10. Uncertain events are broadly classified as ______________.

  1. Predictable and Unpredictable.
  2. Possible and Impossible
  3. Natural and Artificial.
  4. Rare and Continuous
Answer

(A)Predictable and Unpredictable.

QN11. The possibility that actual results may differ from predicted results is known as ______________.

  1. Risk.
  2. Uncertainty.
  3. Peril.
  4. Hazards.
Answer

(A)Risk.

QN12. The success of whole process of risk management depends on its ______________.

  1. Identification
  2. Risk analysis
  3. Assessment of risk
  4. Evaluation of risk
Answer

(A)Identification

QN13. That which covers the cost of self insurance, loading in insurance premiums and enforcing hedging arrangements is ______________.

  1. Cost of Loss Financing
  2. Cost of Control of loss
  3. Cost of Residual Uncertainty
  4. Cost of Internal Risk Reduction
Answer

(A)Cost of Loss Financing

QN14. If RMIS has poor system documentation then the remedy is to provide ______________.

  1. solid vendor account team
  2. internal access to system expert
  3. assessment in proper manner
  4. clear and comprehensive specifications
Answer

(C)assessment in proper manner

QN15. The risk management can be done by ______________.

  1. Insurance
  2. Hedging
  3. Derivatives
  4. All of the above
Answer

(D)All of the above

QN16. The installation of heat or smoke activated sprinkler systems that are designed to minimize fire damage in the outbreak of a fire is an example of ______________.

  1. Loss prevention
  2. Loss reduction
  3. Hedging
  4. Insurance
Answer

(B)Loss reduction

QN17. ______________ is the extra payment done for administrative and capital cost.

  1. Premium
  2. Premium loading
  3. Interest
  4. Contingency
Answer

(B)Premium loading

QN18. Transfer of rights and remedies of the insured to the insurer after indemnity has been effected is called ______________.

  1. Insurable interest
  2. Subrogation
  3. Proximate clause
  4. Money back policy
Answer

(B)Subrogation

QN19. The principle of indemnity is applicable to ______________ only.

  1. Life Insurance
  2. Personal accident insurance
  3. Proximate Cause
  4. Property insurance
Answer

(D)Property insurance

QN20. ______________ is those terms, which are implied in every contract of marine insurance unless they are expressly excluded.

  1. Guarantee
  2. Express Warranties
  3. Implied Warranties
  4. Waiver Clause
Answer

(C)Implied Warranties

QN21. RiskManagement is a subject which falls under ______________.

  1. production
  2. HR
  3. marketing
  4. finance
Answer

(D)finance

QN22. A person employed to do any act for another or to represent another in dealing with a third person refers to ______________.

  1. Principal
  2. Employee
  3. Agent
  4. Development Officer
Answer

(C)Agent

QN23. Insurance contract is sort of contract which is approved by ______________.

  1. The Indian Contract Act
  2. Indian Factory Act
  3. Indian Companies Act
  4. The Indian finance Act
Answer

(A)The Indian Contract Act

QN24. The term Assurance refers to ______________.

  1. Life Insurance Business
  2. Marine Insurance Business
  3. Fire Insurance Business
  4. Motor Vehicle Business
Answer

(A)Life Insurance Business

QN25. The first step in risk management process is ______________.

  1. Riskavoidance
  2. RiskIdentification
  3. Insurance
  4. RiskEvaluation
Answer

(B)RiskIdentification

QN26. Which of the following is the last step in the risk management process?

  1. Insurance
  2. Review
  3. Risk evaluation
  4. Loss prevention
Answer

(A)Insurance

QN27. Risk retention means ______________

  1. Saving money to pay for the losses
  2. Accepting and agreeing to finance the loss oneself
  3. Not taking up any activity which is risky
  4. Insuring the risk
Answer

(B)Accepting and agreeing to finance the loss oneself

QN28. The risk which has three outcomes with possibility of gain is ______________

  1. Pure
  2. Speculative
  3. Static
  4. Dynamic
Answer

(B)Speculative

QN29. The company doing the insurance business is called ______________.

  1. Mutual funds
  2. Non-banking firm
  3. An insurance company
  4. Banking company
Answer

(C)An insurance company

QN30. The medias used for direct marketing are

  1. Direct Mail
  2. Telephone Contacts
  3. Kiosks
  4. All the above
Answer

(D)All the above

QN31. Pure Risk was grouped ______________.

  1. Property Risk
  2. .Personal Risk
  3. Liability risk
  4. All the above
Answer

(D)All the above

QN32. A bancassurance started in India was ______________.

  1. 2002
  2. 2003
  3. 2001
  4. 2000
Answer

(A)2002

QN33. ______________ refers to distribution of insurance products through

  1. Bank
  2. Company
  3. Co-operatives
  4. Sole trader
Answer

(A)Bank

QN34. Risk Management process includes ______________

  1. Risk Analysis
  2. Risk Control
  3. Risk Analysis and Control
  4. Risk Reduction
Answer

(C)Risk Analysis and Control

QN35. The foundation for risk Management is provided by ______________

  1. Risk Control
  2. Risk Analysis
  3. Risk Identification
  4. Risk Retention
Answer

(C)Risk Identification

QN36. Insurance is a risk management technique involving

  1. Risk Retention
  2. Risk Avoidance
  3. Loss Control
  4. Risk Transfer
Answer

(D)Risk Transfer

QN37. Restoring a policy holder to his pre-loss financial position means ______________.

  1. Contribution
  2. Indemnity
  3. Goodwill
  4. LiquidAsset
Answer

(B)Indemnity

QN38. ______________ are the risk management methods

  1. Insurance
  2. Hedging
  3. Derivatives
  4. All the above
Answer

(D)All the above

QN39. The strategy pursued by the business firms to tackle risk by spreading into a number of business is ______________.

  1. Diversification
  2. Centralisation
  3. Risk Retention
  4. Financing
Answer

(A)Diversification

QN40. A firm may seek to minimize marketing risks by undertaking ______________.

  1. Credit Facilities
  2. Training Salesmen
  3. Market Research
  4. Branch Expansion
Answer

(C)Market Research

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