IF1 (questions with correct answers)
graded A+
What is a risk? - correct answer ✔✔The chance of a loss
Risk Seeking - correct answer ✔✔Someone who carries risks themselves
Risk Averse - correct answer ✔✔Minimizing the risk they are exposed to by transferring risks
What is risk management? - correct answer ✔✔Reduces potential losses by identifying and managing
hazards
What is the risk management process? - correct answer ✔✔Risk Identification, Analysis, Control
What is risk identification? - correct answer ✔✔Discovering risks that already exist within a company
and those which might affect it in the future.
What is risk analysis? - correct answer ✔✔Examine data to determine the frequency and severity of the
risk
What is risk control? - correct answer ✔✔Trying to eliminate or reduce the risk
What are the 3 main types of risk control? - correct answer ✔✔Physical, Financial and developing a good
risk control
What are the 3 categories for risk control? - correct answer ✔✔Detective, Preventative and Corrrective
What is insurable, financial or non-financial? - correct answer ✔✔Financial- The item must have a value
so the insured can receive compensation.
, EXCEPTIONS- Benefit policies
What is a pure risk? - correct answer ✔✔A risk where the insured can only make a loss or break even
What is a speculative risk? - correct answer ✔✔A risk where it could make a gain, a loss or break even.
Uninsurable
Particular Risk - correct answer ✔✔A risk which is localised or personal in effect
Fundamental Risk - correct answer ✔✔Large risk that affects many people like war. Unisurable
What makes a risk insurable? - correct answer ✔✔Must be unforseen
Must have insurable interest
Not against public policy
What is insurable interest? - correct answer ✔✔Legal and Financial Relationship between the insured
and the object or liability being insured.
What is public policy? - correct answer ✔✔Must not go against what is considered morally correct.
e.g. Insuring the risk of incurring a fine for criminal offence.
What is an objective risk? - correct answer ✔✔One which is similar to risks in the past
What is a subjective risk? - correct answer ✔✔Where the risk is more unique and is harder to predict the
outcome
What is a homogeneous exposure? - correct answer ✔✔Large number of similar risks.
What are the 4 components of risk? - correct answer ✔✔Uncertainty, Level of Risk, Perils and Hazards
graded A+
What is a risk? - correct answer ✔✔The chance of a loss
Risk Seeking - correct answer ✔✔Someone who carries risks themselves
Risk Averse - correct answer ✔✔Minimizing the risk they are exposed to by transferring risks
What is risk management? - correct answer ✔✔Reduces potential losses by identifying and managing
hazards
What is the risk management process? - correct answer ✔✔Risk Identification, Analysis, Control
What is risk identification? - correct answer ✔✔Discovering risks that already exist within a company
and those which might affect it in the future.
What is risk analysis? - correct answer ✔✔Examine data to determine the frequency and severity of the
risk
What is risk control? - correct answer ✔✔Trying to eliminate or reduce the risk
What are the 3 main types of risk control? - correct answer ✔✔Physical, Financial and developing a good
risk control
What are the 3 categories for risk control? - correct answer ✔✔Detective, Preventative and Corrrective
What is insurable, financial or non-financial? - correct answer ✔✔Financial- The item must have a value
so the insured can receive compensation.
, EXCEPTIONS- Benefit policies
What is a pure risk? - correct answer ✔✔A risk where the insured can only make a loss or break even
What is a speculative risk? - correct answer ✔✔A risk where it could make a gain, a loss or break even.
Uninsurable
Particular Risk - correct answer ✔✔A risk which is localised or personal in effect
Fundamental Risk - correct answer ✔✔Large risk that affects many people like war. Unisurable
What makes a risk insurable? - correct answer ✔✔Must be unforseen
Must have insurable interest
Not against public policy
What is insurable interest? - correct answer ✔✔Legal and Financial Relationship between the insured
and the object or liability being insured.
What is public policy? - correct answer ✔✔Must not go against what is considered morally correct.
e.g. Insuring the risk of incurring a fine for criminal offence.
What is an objective risk? - correct answer ✔✔One which is similar to risks in the past
What is a subjective risk? - correct answer ✔✔Where the risk is more unique and is harder to predict the
outcome
What is a homogeneous exposure? - correct answer ✔✔Large number of similar risks.
What are the 4 components of risk? - correct answer ✔✔Uncertainty, Level of Risk, Perils and Hazards
