Finance

Terrorists attacked the World Trade Center on September 11, 2001. The

Terrorists attacked the World Trade Center on September 11, 2001. The attack simultaneously created large losses for life insurers, property insurers, workers compensation insurers, health insurers, and liability insurers. What name is given to an event that simultaneously creates large losses in several lines of insurance? A) speculative loss B) clash loss C) retroactive loss […]

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Date: September 19th, 2020

A U.S. athletic equipment company has production plants in several Pac

A U.S. athletic equipment company has production plants in several Pacific Rim countries. Each plant is divided into separate production areas using six-foot thick concrete walls. The construction method is designed to prevent fire from spreading from one production area to another. Using thick concrete walls so that fire does not spread to another production […]

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Date: September 19th, 2020

A comprehensive risk management program that addresses an organization

A comprehensive risk management program that addresses an organization’s pure risks, speculative risks, strategic risks, and operational risks is called a(n) A) risk management information system. B) financial risk management plan. C) speculative risk management plan. D) enterprise risk management plan.     ANSWER Answer: D

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Date: September 19th, 2020

Regional Airline (RA) spends millions of dollars each year on jet fuel

Regional Airline (RA) spends millions of dollars each year on jet fuel. The company also has significant liability exposures. RA can retain a large portion of its liability exposure if fuel costs are low. The company can pay high fuel costs if retained liability losses are low. RA cannot, however, absorb both high fuel costs […]

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Date: September 19th, 2020

Which of the following statements about the scope of risk management i

Which of the following statements about the scope of risk management is (are) true? I. Traditionally, risk management was limited in scope to speculative loss exposures. II. In the 1990s, some businesses began to expand the scope of risk management to include financial risks. A) I only B) II only C) both I and II […]

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Date: September 19th, 2020

Mid-States Beef is a commercial feedlot business. Currently, the compa

Mid-States Beef is a commercial feedlot business. Currently, the company has over 10,000 cattle in feedlots. Mid-States is concerned that the price of corn, the grain fed to the cattle, will increase significantly. The risk that the price of corn may increase and harm the profitability of Mid-States Beef’s operations is a(n) A) currency exchange […]

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Date: September 19th, 2020

The property and liability insurance industry is characterized by a re

The property and liability insurance industry is characterized by a repetitive pattern of loose underwriting standards with low premiums followed by tight underwriting standards with high premiums. This repetitive pattern is called the A) underwriting by exception method. B) business cycle. C) underwriting cycle. D) account underwriting method.     ANSWER Answer: C

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Date: September 19th, 2020