Insurance and Risk Management Online MCQ Set 3

QN01. When the subject matter insured is destroyed wholly refers to ______________.

  1. Partial loss
  2. Actual total loss
  3. Constructive total loss
  4. Maximum loss
Answer

(B)Actual total loss

QN02. Marine perils is also called as ______________.

  1. Perils of the Sea
  2. Moral Hazards
  3. MarineClause
  4. Marinelaws
Answer

(A)Perils of the Sea

QN03. ______________ is a document which provides evidence of the contract of insurance

  1. Proposal form
  2. Policy form
  3. Cover note
  4. Certificate of insurance
Answer

(B)Policy form

QN04. Insurance is a risk management technique involving ______________.

  1. Risktransfer
  2. Riskretention
  3. Riskavoidance
  4. Losscontrol
Answer

(A)Risktransfer

QN05. Which of the following helps in Risk improvement?

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

(C)Engineers who survey property to be insured

QN06. The business of insurance is related to protection of ______________.

  1. Savings
  2. Status
  3. Profits
  4. Economic value of assets
Answer

(D)Economic value of assets

QN07. Loss control involves a combination of ______________.

  1. effort and time
  2. fund and time
  3. funds effort or time
  4. effort and fund
Answer

(C)funds effort or time

QN08. An insurance company estimates its objective risk for 10,000 exposures at 10 Per cent. Assuming the probability of loss remains the same, what would happen to the objective risk if the number of exposures were to increase to 1 million?

  1. It would decrease to 1 percent
  2. It would decrease to 5 percent
  3. It would remain the same
  4. It would increase to 20 percent
Answer

(A)It would decrease to 1 percent

QN09. All of the following are social costs associated with insurance Except ______________.

  1. increased cost of capital
  2. the expense of doing business
  3. fraudulent claims
  4. inflated claims
Answer

(A)increased cost of capital

QN10. Risk of premature death is a ______________.

  1. Financial Risk
  2. Dynamic Risk
  3. Subjective Risk
  4. Personal Risk
Answer

(D)Personal Risk

QN11. All dynamic risks are ______________.

  1. predictable
  2. Unpredictable
  3. Possibility
  4. Judgement
Answer

(A)predictable

QN12. The agreement refers to ______________.

  1. Offer
  2. Acceptance
  3. Free Consent
  4. All the above
Answer

(D)All the above

QN13. The System that brings together the operative causes of perils is ______________

  1. Risk Evaluation
  2. Safety Audit
  3. Risk Financing
  4. Fault Tree Analysis
Answer

(B)Safety Audit

QN14. The main aim of risk Financing is to ______________

  1. Control the risk
  2. Avoid the Risk
  3. Spread the Risk
  4. Financing the Risk
Answer

(C)Spread the Risk

QN15. The claim amount received from insurer are treated as ______________.

  1. Nontaxable Income
  2. TaxableGain
  3. Gains
  4. Reserve
Answer

(B)TaxableGain

QN16. Franchise and aggregate excess of loss are two variations of ______________.

  1. Coinsurance
  2. Excess of Loss
  3. First Loss
  4. Proximate Cause
Answer

(B)Excess of Loss

QN17. The risk management which refers to the identification of pure risk faced by an individual or family is ______________.

  1. Corporate
  2. Individual
  3. Joint Stock Companies
  4. Partnership Firm
Answer

(B)Individual

QN18. The 5th chapter of Factories Act deals with ______________.

  1. Safety
  2. Welfare
  3. The Inspecting Staff
  4. Marketing Manager
Answer

(B)Welfare

QN19. Dynamic risks are closely related to ______________.

  1. Speculative risks
  2. Static Risks
  3. Personal Risks
  4. Particular
Answer

(A)Speculative risks

QN20. In order to minimize the impact of uncertain events risk management is concerned with planning arranging and controlling of ______________.

  1. Men and Material
  2. Resources and Market
  3. Activities and Resources
  4. Men and Activities
Answer

(B)Resources and Market

QN21. The number of prime elements of risk analysis is ______________.

  1. one
  2. Two
  3. Three
  4. Four
Answer

(B)Two

QN22. The identification analysis and economic control of those risk which can threaten the assets or earning capacity of an enterprise is known as ______________.

  1. Business Management
  2. Risk Management
  3. Financial Management
  4. Strategic Management
Answer

(B)Risk Management

QN23. The uncertainty reduced through diversification and investing in information is known as ______________.

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

(D)Cost of Internal Risk Reduction

QN24. If RMIS shows inflexibility of system then provide ______________.

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

(C)internal access to system expert

QN25. Risk management information is not useful in one of the following ______________.

  1. Reporting
  2. Hedging
  3. Claim adjustment process reviews
  4. Derivatives
Answer

(B)Hedging

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

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

(A)Insurance

QN27. The Principle 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

QN28. Except life assurance the maximum term of other insurance is ______________.

  1. 12 months
  2. 24 months
  3. 6 months
  4. 36 months
Answer

(A)12 months

QN29. ______________ are those terms, which are written on the policy.

  1. Express Warranties
  2. Implied Warranties
  3. Memorandum Warranties
  4. Valuation Clause
Answer

(A)Express Warranties

QN30. ______________ policy issued on the basis of the number of persons assured.

  1. Annuity policy
  2. Multiple life policy
  3. Single life policy
  4. Level of premium policy
Answer

(B)Multiple life policy

QN31. ______________ means a willful and intentional act on part of the self-destroyed.

  1. Death
  2. Suicide
  3. Murder
  4. Accident
Answer

(B)Suicide

QN32. Which of the following contract is not legally enforceable?

  1. Contract of insurance
  2. Wagering contract
  3. Contract of sale of goods
  4. Contract of business
Answer

(B)Wagering contract

QN33. Which of the statments are true?

  1. Loss prevention and loss reduction mean different things
  2. Risk may be transfered by contract
  3. Both the statements
  4. Neither is correct
Answer

(C)Both the statements

QN34. If the most impossible event is assigned a value of zero, then most inevitable event is assigned a value ______________.

  1. one
  2. Between Zero and one
  3. Between Zero to 10
  4. Between 10 to 10
Answer

(A)one

QN35. Contractual risk transfers come under ______________

  1. Cost of loss financing
  2. Cost of internal risk reduction
  3. Cost of control of loss
  4. Cost of residual uncertainty
Answer

(B)Cost of internal risk reduction

QN36. The risk management methods are ______________

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

(D)All of the above

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

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

(D)All of the above

QN38. Which of the following types of risks best meets the requirements for being insurable by private insurers?

  1. market risks
  2. property risks
  3. financial risks
  4. political risks
Answer

(B)property risks

QN39. Risk and Premium are fixed on the basis of ______________.

  1. strategic Methods
  2. Survey Methods
  3. Scientific Methods
  4. Probability Methods
Answer

(C)Scientific Methods

QN40. Medical Expenses Risk Comes under?

  1. Business Risk
  2. Price Risk
  3. Credit Risk
  4. Personal Risk
Answer

(D)Personal Risk

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