XCEL Chapter 2 2024 UPDATE
MOST TESTED TEST PRACTICE COMPREHENSIVE
QUESTIONS AND VERIFIED CORRECT ANSWERS
GRADE A+ GET IT RIGHT
An example of risk sharing would be?
A. Adding more security to a high-risk building
B. Choosing not to invest in the stock market
C. Doctors pooling their money to cover malpractice exposures
D. Buying an insurance policy to cover potential liabilities -
(correct answer) Doctors pooling their money to cover
malpractice exposures
Insurance represents the process of risk?
A. selection
B. avoidance
C. transference
D. assumption - (correct answer) transference
How do insurers predict the increase of individual risks?
A. Law of large numbers
, B. U.S. Census
C. Average mortality incidents
D. Experience of morbidity - (correct answer) Law of large
numbers
What is known as the immediate specific event causing loss and
giving rise to risk?
A. Peril
B. Hazard
C. Loss factor
D. Liability - (correct answer) Peril
All of the following are examples of pure risk EXCEPT?
A. Losing money at a casino
B. Injured while playing football
C. Falling at a casino and breaking a hip
D. Jewelry stolen during a home robbery - (correct answer)
Losing money at a casino
People with higher loss exposure have the tendency to
purchase insurance more often than those at average risk. This
is called?
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