Insurance and Risk Management Online MCQ Set 2

QN01. The principles of indemnity does not apply to ______________.

  1. Burglary insurance
  2. Fire insurance
  3. Marine insurance
  4. Life and Personal Accident insurance
Answer

(D)Life and Personal Accident insurance

QN02. The risk that arises because of magnitude of cash flow due to change in output and input prices is known as ______________.

  1. Credit risk
  2. Particular risk
  3. Business risk
  4. Price risk
Answer

(D)Price risk

QN03. Cost of risk has the following components ______________.

  1. Cost of Expected Losses and Cost of Control of Loss
  2. Cost of Expected Losses and Cost of Loss Financing
  3. Cost of Control of Loss and Cost of Loss Financing
  4. Cost of Expected Loss, Cost of Control of Loss Cost of Financing, Cost of Residual Uncertainity
Answer

(D)Cost of Expected Loss, Cost of Control of Loss Cost of Financing, Cost of Residual Uncertainity

QN04. If RMIS has the problem of incompatibility of software then the remedy is to provide ______________.

  1. solid vendor account team
  2. internal access to system expert
  3. clear and comprehensive specifications
  4. financial check
Answer

(C)clear and comprehensive specifications

QN05. To avoid RMIS being obsolete provide ______________.

  1. solid vendor account team
  2. internal access to system expert
  3. standard software configuration
  4. clear and comprehensive specifications
Answer

(C)standard software configuration

QN06. The process of reducing the level of risky activities firstly affect the frequency of losses is the strategy of ______________.

  1. Risk avoidance
  2. Retention
  3. Hedging
  4. Other contractual risk transfer
Answer

(A)Risk avoidance

QN07. Which of the statements is correct? a. Insurance is a transfer of risk mechanism. b. Insurance gives physical protection to assets.

  1. Statement A
  2. Statement B
  3. Both the statements
  4. Neither of the statements
Answer

(A)Statement A

QN08. A complete proposal form contains information about ______________.

  1. Moral hazard
  2. Physical hazard
  3. Personal history of proposer and identify of the property insurance
  4. All of the above
Answer

(B)Physical hazard

QN09. This policy covers all risks to the ship and its cargo while the ship is at a particular port ______________.

  1. Voyage policy
  2. Floating policy
  3. Time policy
  4. Portrisk Policy
Answer

(D)Portrisk Policy

QN10. _______________ policy matures on the assured death or on his attainment of a particular age whichever occurs earlier.

  1. Endowment
  2. Money back
  3. Joint life
  4. Single premium
Answer

(A)Endowment

QN11. Assignment of life policy means ______________.

  1. Transferring rights to the assignee
  2. Policy holder is entitled to the paid up value
  3. Paid up value is always higher than surrender value
  4. Value payable on assured death or maturity
Answer

(A)Transferring rights to the assignee

QN12. Risk insured against death is a contract of ______________.

  1. Assurance
  2. Agreement
  3. Indemnity
  4. Caveat Emptor
Answer

(A)Assurance

QN13. The risk which arises because of change in major economic, social, cultural and political factors are ______________.

  1. ParticularRisk
  2. Fundamental Risk
  3. Speculative Risk
  4. Dynamic Risk
Answer

(B)Fundamental Risk

QN14. When an event is stated to be possible, it has a probability between ______________.

  1. Zero and One
  2. Zero or One
  3. None of these
  4. Both of the above
Answer

(A)Zero and One

QN15. If the premium loading is zero then purchasing insurance ______________

  1. does not change the persons expected wealth
  2. changes the persons expected wealth
  3. increases the variability of wealth
  4. no change in expected wealth
Answer

(A)does not change the persons expected wealth

QN16. Insurance cover ______________.

  1. Protect assets
  2. Prevents loss
  3. Reduces the impact of loss
  4. Insurances immortality
Answer

(C)Reduces the impact of loss

QN17. Taylor Tobacco Company is concerned that the company may be held liable in a court of law and forced to pay a large damage award. The characteristics of the judicial system that increase the frequency and severity of losses is known as ______________.

  1. moral hazard
  2. particular risk
  3. speculative risk
  4. legal hazard
Answer

(D)legal hazard

QN18. Bancassurance means ______________.

  1. Selling financial services
  2. general liability insurance
  3. Selling banking products
  4. Selling Insurance Products
Answer

(D)Selling Insurance Products

QN19. Credit Risk is high in case of ______________.

  1. Companies
  2. Partnership
  3. Financial Institutions
  4. None of these
Answer

(C)Financial Institutions

QN20. A bancassurance concept originated in ______________.

  1. England
  2. Finland
  3. France
  4. Spain
Answer

(C)France

QN21. The cause of loss or a contingency that may cause a loss due to nature is known as ______________

  1. Hazard
  2. Peril
  3. Risk
  4. Uncertinity
Answer

(B)Peril

QN22. The risk which directly affects the individual's capability to earn income is called ______________

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

(A)Personal Risk

QN23. Type of Risk Management are ______________

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

(D)Risk Analysis,Risk Control,Risk Financing

QN24. The Risks which have some financial impact from the part of risk management are ______________

  1. Dynamic and Speculative Risk
  2. Pure and Speculative Risk
  3. Pure and Static Risk
  4. Personal and Static Risk
Answer

(B)Pure and Speculative Risk

QN25. The measures aimed at avoiding, eliminating or reducing the chances of loss producing events is covered by ______________.

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

(B)Risk Control

QN26. Identification of sources of hazard will have to be done by the ______________.

  1. Production manager
  2. Risk manager
  3. Finance manager
  4. General manager
Answer

(A)Production manager

QN27. The expected value of losses varies directly with the ______________.

  1. time period
  2. financial period
  3. fixed period
  4. fluctuating period
Answer

(A)time period

QN28. The number of elements of uncertainty in most type of events are ______________.

  1. Three
  2. Two
  3. One
  4. Five
Answer

(B)Two

QN29. Personnel risk in a firm depends upon the ability integrity and enthusiasm of ______________.

  1. Creditors
  2. Debtors
  3. Government
  4. Management and Employees
Answer

(D)Management and Employees

QN30. Except life assurance the maximum term of other insurance is ______________.

  1. twelve months
  2. twenty four months
  3. six months
  4. thirty six months
Answer

(A)twelve months

QN31. The situation of doubt in mind about the happening or not happening of anything in future because of lack of knowledge ______________.

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

(B)Uncertainty

QN32. Transfer of risk to other party is done through ______________.

  1. Reduction
  2. Control
  3. Retention
  4. Insurance
Answer

(D)Insurance

QN33. The cost of uncertainty that remains once the firm has selected and implemented loss control loss financing and internal risk reduction is called ______________.

  1. Cost of Residual Uncertainty
  2. Cost of Expected Losses
  3. Cost of Price Change
  4. Cost of Loss Control
Answer

(A)Cost of Residual Uncertainty

QN34. If RMIS shows lack of service then you need to provide ______________.

  1. reference checks including on site
  2. assessment in proper manner
  3. financial check
  4. standard software configuration
Answer

(C)financial check

QN35. The methods of risk management are ______________.

  1. Loss Control
  2. Loss Financing
  3. Internal Risk Reduction
  4. All of the above
Answer

(D)All of the above

QN36. Which of the following helps in risk improvement?

  1. Fire brigade
  2. Salvage corps
  3. Engineers who survey property to be insured
  4. Ambulance
Answer

(C)Engineers who survey property to be insured

QN37. The insurance plays a role in the economic development of the country in the following ways ______________.

  1. Releases capital for new investments
  2. The job potential increases
  3. Money collected is invested in infrastructure
  4. All of the above
Answer

(D)All of the above

QN38. Malhotra Commitee was appointed in

  1. 1993
  2. 1994
  3. 1999
  4. 2000
Answer

(A)1993

QN39. Fire insurance can be taken in respect of ______________

  1. movable property only
  2. immovable property only
  3. both movable and immovable properties
  4. persons only
Answer

(C)both movable and immovable properties

QN40. ______________ is an agreement where by the insurer agrees to indemnity the insured against marine losses.

  1. Life insurance
  2. Fire insurance
  3. Marine insurance
  4. Public liability insurance
Answer

(C)Marine insurance

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