Which of the following is a financial risk that may be faced by a business organization? A) injuries suffered by employees at the workplace B) lost income after a fire loss C) product liability risk D) currency exchange rate risk ANSWER Answer: D
Date: September 19th, 2020
Purchasing health insurance illustrates the use of which personal risk management technique? A) avoidance B) risk transfer C) risk control D) risk retention ANSWER Answer: B
Date: September 19th, 2020
Which of the following statements about captive insurance companies is (are) true? I. A captive insurance company established by a U.S. company must be domiciled in the United States. II. A captive insurance company may be owned by several parents. A) I only B) II only C) both I and II D) neither I nor […]
Date: September 19th, 2020
Mark owns a 2006 sedan. The last time Mark renewed his auto insurance, he decided to drop the physical damage insurance on this vehicle. How is Mark dealing with the auto physical damage exposure in his personal risk management program? A) risk transfer B) passive retention C) avoidance D) active retention ANSWER Answer: […]
Date: September 19th, 2020
Which of the following statements concerning the selection of risk management techniques and insurance market conditions is (are) true? I. It’s easier to purchase affordable insurance during a “soft ” market than during a “hard” market. II. Retention is used more during a “soft” market than during a “hard” market. A) I only B) II […]
Date: September 19th, 2020
Discount Department Stores is a national retail chain. The company had one large, central warehouse. At the suggestion of the risk manager, the company decided to build four smaller regional warehouses so that a loss at the central warehouse would not be a catastrophic blow to the company’s distribution system. Splitting the inventory between four […]
Date: September 19th, 2020
Each accounting period, Harris Company Department Store charges a bookkeeping account for its estimated shoplifting losses. The method that Harris Company Department Store uses to fund its retained shoplifting losses is a(n) A) private insurance policy. B) captive insurer. C) credit line. D) unfunded reserve. ANSWER Answer: D
Date: September 19th, 2020
Parker Department Stores has been hurt in recent months by a large increase in shoplifting losses. Parker’s risk manager concluded that while the frequency of shoplifting losses was high, the severity is still relatively low. What is (are) the appropriate risk management technique(s) to apply to this problem? A) retention B) loss prevention C) transfer […]
Date: September 19th, 2020
When Derrick became risk manager of Boller Company, he noticed that the company did not have a clear set of risk management objectives and a clearly-stated risk management philosophy. Derrick developed a written document stating the company’s risk management objectives and risk management philosophy. This document is called a risk management A) policy statement. B) […]
Date: September 19th, 2020
Barb, who is self-employed, is the main breadwinner for her family. Barb does not have disability income insurance because she has never stopped to consider the impact of a long-term disability upon her family. Barb’s treatment of the risk of disability is best described as A) risk transfer. B) passive retention. C) risk avoidance. D) […]
Date: September 19th, 2020
