1. The possibility that actual results may differ from predicted results is known as ______________.
a) Risk.
b) Uncertainty.
c) Peril.
d) Hazards.
2. The success of whole process of risk management depends on its ______________.
a) Identification
b) Risk analysis
c) Assessment of risk
d) Evaluation of risk
3. . That which covers the cost of self insurance, loading in insurance premiums and enforcing hedging
arrangements is ______________.
a) Cost of Loss Financing
b) Cost of Control of loss
c) Cost of Residual Uncertainty
d) Cost of Internal Risk Reduction
4. If RMIS has poor system documentation then the remedy is to provide ______________.
a) solid vendor account team
b) internal access to system expert
c) assessment in proper manner
d) clear and comprehensive specifications
5. The risk management can be done by ______________.
a) Insurance
b) Hedging
c) Derivatives
d) All of the above
6. The installation of heat or smoke activated sprinkler systems that are designed to minimize fire
damage in the outbreak of a fire is an example of ______________
a) Loss prevention
b) Loss reduction
c) Hedging
d) Insurance
7. ______________ is the extra payment done for administrative and capital cost.
a) Premium
b) Premium loading
c) Interest
d) Contingency
8. Transfer of rights and remedies of the insured to the insurer after indemnity has been effected is
called ______________.
a) Insurable interest
b) Subrogation
c) Proximate clause
d) Money back policy
9. The principle of indemnity is applicable to ______________ only
a) Life Insurance
b) Personal accident insurance
c) Proximate Cause
d) Property insurance
10. ______________ is those terms, which are implied in every contract of marine insurance unless they
are expressly excluded.
a) Guarantee
b) Express Warranties
c) Implied Warranties
d) Waiver Clause
11. Pure Risk was grouped ______________.
a) Property Risk
b) Personal Risk.
c) Liability risk
d) All the above
12. A bancassurance started in India was ______________.
a) 2002
b) 2003
c) 2001
d) 2000
13. ______________ refers to distribution of insurance products through
a) Bank
b) Company
c) Co-operatives
d) Sole trader
14. Risk Management process includes ______________
a) Risk Analysis
b) Risk Control
c) Risk Analysis and Control
d) Risk Reduction
15. The foundation for risk Management is provided by ______________
a) Risk Control
b) Risk Analysis
c) Risk Identification
d) Risk Retention
16. Insurance is a risk management technique involving
a) Risk Retention
b) Risk Avoidance
c) Loss Control
d) Risk Transfer
17. Restoring a policy holder to his pre-loss financial position means ______________.
a) Contribution
b) Indemnity
c) Goodwill
d) LiquidAsset
18. ______________ are the risk management methods
a) Insurance
b) Hedging
c) Derivatives
d) All the above
19. The strategy pursued by the business firms to tackle risk by spreading into a number of business is
______________.
a) Diversification
b) Centralisation
c) Risk Retention
d) Financing
20. A firm may seek to minimize marketing risks by undertaking ______________.
a) Credit Facilities
b) Training Salesmen
c) Market Research
d) Branch Expansion
21. The Insurance is a ______________
a) Contract
b) Uncertainty
c) Peril
d) Hazard
22. Losses arising due to a risk exposure retained or assured is known as ______________
a) Risk Reduction
b) Risk Financing
c) Risk Retention
d) Risk Sharing
23. An alternative approach to the check list is ______________
a) Threat Analysis
b) Event Analysis
c) Operability Study
d) Minimum Level Analysis
24. The measures aimed at avoiding,eliminating or reducing the chances of loss production is covered by
______________
a) Risk Control
b) Risk Retention
c) Risk Avoidance
d) Risk Financing
25. Insurance is best suited to risk with ______________
a) high frequency and low loss severity
b) low frequency and high loss severity.
c) minimum frequency and no loss severity
d) high frequency and high loss severity.
26. The risk manager maybe able to identify the new ventures involved in ______________.
a) Pure risk.
b) Group Risk.
c) Speculative risk
d) Particular risk.
27. An instrument by which a pure risk is transferred by a party other than insurer is
a) Insurance
b) Retention.
c) Non Insurance Transfer.
d) Reinsurance
28. The Person whose risk is insured is called ______________.
a) Insured
b) merchandiser
c) marketer
d) Agents
29. That which is designed to improve the information on which decisions are take to reduce risk is
______________.
a) Transfer
b) Research
c) Costs.
d) Deflation
30. Uncertain events are broadly classified as ______________.
a) Predictable and Unpredictable
b) Possible and Impossible
c) Natural and Artificial.
d) Rare and Continuous
31. RiskManagement is a subject which falls under ______________.
a) production
b) HR
c) marketing
d) finance
32. A person employed to do any act for another or to represent another in dealing with a third person
refers to ______________.
a) Principal
b) Employee
c) Agent
d) Development Officer
33. Insurance contract is sort of contract which is approved by ______________.
a) The Indian Contract Act
b) Indian Factory Act
c) Indian Companies Act
d) The Indian finance Act
34. The term Assurance refers to ______________.
a) Life Insurance Business
b) Marine Insurance Business
c) Fire Insurance Business
d) Motor Vehicle Business
35. The first step in risk management process is ______________.
a) Riskavoidance
b) RiskIdentification
c) Insurance
d) RiskEvaluation
36. Which of the following is the last step in the risk management process?
a) Insurance
b) Review
c) Risk evaluation
d) Loss prevention
37. Risk retention means ______________
a) Saving money to pay for the losses
b) Accepting and agreeing to finance the loss oneself
c) Not taking up any activity which is risky
d) Insuring the risk
38. The risk which has three outcomes with possibility of gain is ______________
a) Pure
b) Speculative
c) Static
d) Dynamic
39. The company doing the insurance business is called ______________.
a) Mutual funds
b) Non-banking firm
c) An insurance company
d) Banking company
40. The medias used for direct marketing are
a) Direct Mail
b) Telephone Contacts
c) Kiosks
d) All the above
41. The principles of indemnity does not apply to ______________.
a) Burglary insurance
b) Fire insurance
c) Marine insurance
d) Life and Personal Accident insurance
42. The risk that arises because of magnitude of cash flow due to change in output and input prices is
known as ______________.
a) Credit risk
b) Particular risk
c) Business risk
d) Price risk
43. Cost of risk has the following components ______________.
a) Cost of Expected Losses and Cost of Control of Loss
b) Cost of Expected Losses and Cost of Loss Financing
c) Cost of Control of Loss and Cost of Loss Financing
d) Cost of Expected Loss, Cost of Control of Loss Cost of Financing, Cost of Residual Uncertainity
44. If RMIS has the problem of incompatibility of software then the remedy is to provide
______________.
a) solid vendor account team
b) internal access to system expert
c) clear and comprehensive specifications
d) financial check
45. To avoid RMIS being obsolete provide ______________.
a) solid vendor account team
b) internal access to system expert
c) standard software configuration
d) clear and comprehensive specifications
46. The process of reducing the level of risky activities firstly affect the frequency of losses is the strategy
of ______________.
a) Risk avoidance
b) Retention
c) Hedging
d) Other contractual risk transfer
47. Which of the statements is correct? a. Insurance is a transfer of risk mechanism. b. Insurance gives
physical protection to assets.
a) Statement A
b) Statement B
c) Both the statements
d) Neither of the statements
48. A complete proposal form contains information about ______________.
a) Moral hazard
b) Physical hazard
c) Personal history of proposer and identify of the property insurance
d) All of the above
49. This policy covers all risks to the ship and its cargo while the ship is at a particular port
______________.
a) Voyage policy
b) Floating policy
c) Time policy
d) Portrisk Policy
50. _______________ policy matures on the assured death or on his attainment of a particular age
whichever occurs earlier.
a) Endowment
b) Money back
c) Joint life
d) Single premium
51. The cause of loss or a contingency that may cause a loss due to nature is known as ______________
a) Hazard
b) Peril
c) Risk
d) Uncertinity
52. The risk which directly affects the individual's capability to earn income is called ______________
a) Personal Risk
b) Risk Financing
c) Risk Retention
d) Risk Sharing
53. Type of Risk Management are ______________
a) Risk Retention,Risk Analysis,Risk Financing
b) Risk Analysis,Risk Control,Risk Financing
c) Risk Control,Risk Retention,Risk Avoidance
d) Risk Analysis,Risk Control,Risk Financing
54. The Risks which have some financial impact from the part of risk management are ______________
a) Dynamic and Speculative Risk
b) Pure and Speculative Risk
c) Pure and Static Risk
d) Personal and Static Risk
55. The measures aimed at avoiding, eliminating or reducing the chances of loss producing events is
covered by ______________.
a) Risk Avoidance
b) Risk Control
c) Risk Evaluation
d) Risk Financing
56. Identification of sources of hazard will have to be done by the ______________.
a) Production manager
b) Risk manager
c) Finance manager
d) General manager
57. The expected value of losses varies directly with the ______________.
a) time period
b) financial period
c) fixed period
d) fluctuating period
58. The number of elements of uncertainty in most type of events are ______________.
a) Three
b) Two
c) One
d) Five
59. Personnel risk in a firm depends upon the ability integrity and enthusiasm of ______________.
a) Creditors
b) Debtors
c) Government
d) Management and Employees
60. Except life assurance the maximum term of other insurance is ______________.
a) twelve months
b) twenty four months
c) six months
d) thirty six months
61. Assignment of life policy means ______________.
a) Transferring rights to the assignee
b) Policy holder is entitled to the paid up value
c) Paid up value is always higher than surrender value
d) Value payable on assured death or maturity
62. Risk insured against death is a contract of ______________.
a) Assurance
b) Agreement
c) Indemnity
d) Caveat Emptor
63. The risk which arises because of change in major economic, social, cultural and political factors are
______________.
a) ParticularRisk
b) Fundamental Risk
c) Speculative Risk
d) Dynamic Risk
64. When an event is stated to be possible, it has a probability between ______________.
a) Zero and One
b) Zero or One
c) None of these
d) Both of the above
65. If the premium loading is zero then purchasing insurance ______________
a) does not change the persons expected wealth
b) changes the persons expected wealth
c) increases the variability of wealth
d) no change in expected wealth
66. Insurance cover ______________.
a) Protect assets
b) Prevents loss
c) Reduces the impact of loss
d) Insurances immortality
67. Taylor Tobacco Company is concerned that the company may be held liable in a court of law and
forced to pay a large damage award. The characteristics of the judicial system that increase the
frequency and severity of losses is known as ______________.
a) moral hazard
b) particular risk
c) speculative risk
d) legal hazard
68. Bancassurance means ______________
a) Selling financial services
b) general liability insurance
c) Selling banking products
d) Selling Insurance Products
69. Credit Risk is high in case of ______________.
a) Companies
b) Partnership
c) Financial Institutions
d) None of these
70. A bancassurance concept originated in ______________.
a) England
b) Finland
c) France
d) Spain
71. When the subject matter insured is destroyed wholly refers to ______________.
a) Partial loss
b) Actual total loss
c) Constructive total loss
d) Maximum loss
72. Marine perils is also called as ______________.
a) Perils of the Sea
b) Moral Hazards
c) MarineClause
d) Marinelaws
73. ______________ is a document which provides evidence of the contract of insurance
a) Proposal form
b) Policy form
c) Cover note
d) Certificate of insurance
74. Insurance is a risk management technique involving ______________.
a) Risktransfer
b) Riskretention
c) Riskavoidance
d) Losscontrol
75. Which of the following helps in Risk improvement?
a) Fire brigade
b) Salvage crops
c) Engineers who survey property to be insured
d) Ambulance
76. The business of insurance is related to protection of ______________.
a) Savings
b) Status
c) Profits
d) Economic value of assets
77. Loss control involves a combination of ______________.
a) effort and time
b) fund and time
c) funds effort or time
d) effort and fund
78. . 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?
a) It would decrease to 1 percent
b) It would decrease to 5 percent
c) It would remain the same
d) It would increase to 20 percent
79. All of the following are social costs associated with insurance Except ______________.
a) increased cost of capital
b) the expense of doing business
c) fraudulent claims
d) inflated claims
80. Risk of premature death is a ______________.
a) Financial Risk
b) Dynamic Risk
c) Subjective Risk
d) Personal Risk
81. The number of prime elements of risk analysis is ______________.
a) one
b) Two
c) Three
d) Four
82. The identification analysis and economic control of those risk which can threaten the assets or
earning capacity of an enterprise is known as ______________.
a) Business Management
b) Risk Management
c) Financial Management
d) Strategic Management
83. The uncertainty reduced through diversification and investing in information is known as
______________
a) Cost of Residual Uncertainty
b) Cost of Loss Financing
c) Cost of Loss Control
d) Cost of Internal Risk Reduction
84. If RMIS shows inflexibility of system then provide ______________.
a) solid vendor account team
b) clear and comprehensive specifications
c) internal access to system expert
d) standard software configuration
85. Risk management information is not useful in one of the following ______________.
a) Reporting
b) Hedging
c) Claim adjustment process reviews
d) Derivatives
86. Which of the following is the last step in risk management process ______________.
a) Insurance
b) Review
c) Risk evaluation
d) Loss prevention
87. The Principle of Indemnity does not apply to ______________.
a) Burglary Insurance
b) Fire Insurance
c) Marine Insurance
d) Life and personal accident insurance
88. Except life assurance the maximum term of other insurance is ______________.
a) 12 months
b) 24 months
c) 6 months
d) 36 months
89. ______________ are those terms, which are written on the policy.
a) Express Warranties
b) Implied Warranties
c) Memorandum Warranties
d) Valuation Clause
90. ______________ policy issued on the basis of the number of persons assured
a) Annuity policy
b) Multiple life policy
c) Single life policy
d) Level of premium policy
91. The premium implies ______________
a) Consideration by Service
b) Consideration by cash
c) Consideration by Kind
d) Speculative Cash
92. A risk manager should report to ______________
a) Managing Director
b) Company Secretary
c) Supervisor
d) General Manager
93. The Risk Evaluation breaks into two parts.They are ______________
a) The cause of loss and its affects
b) The probability of loss occurring and its severity
c) The loss due to any reasons
d) The risk and return
94. The condition for insurable interest is ______________.
a) Loss should be sufficiently in monetary terms
b) Loss potential should be sufficiently large
c) Interest on the subject matter of the insurance
d) Loss cannot be managed
95. Having money available when it is needed is defined as the art of ______________.
a) Financial management
b) Risk management
c) Contingency fund
d) Surplus
96. Risk management is concerned with ______________.
a) Planning
b) Arranging and controlling of activities
c) Managing of funds
d) Planning, arranging and controlling of activities
97. In alike the risk of creditors and shareholders by High Capital Gearing ratio companies is
______________.
a) Increased
b) Decreased
c) Government
d) Management and Employees
98. That which are not independent parts of the whole risk management process are ______________.
a) Risk Control and Risk Financing
b) Risk Retention and Risk Analysis
c) Risk Retention and Risk Financing
d) Risk Analysis and Risk Control
99. That which helps to determine the accuracy and relevance of risk at each stage to which an
organization is exposed is known as ______________.
a) Principle of Identification
b) Principle of Risk Analysis
c) Principle of Assessment Risk
d) Principle of Corrective Decision
100. The cost of increased precautions and limits on risky activity to reduce the frequency and severity of
accidents and losses is covered by ______________.
a) Cost of Loss Financing
b) Cost of Expected Losses
c) Cost of Control of Loss
d) Cost of Internal Risk Reduction