瑞达Rejda保险教材英文练习题03

1、Principles of Risk Management and Insurance, lie (Rejda)Chapter 3 Introduction to Risk Management1) Risk management is concerned withA) the identification and treatment of loss exposures.B) the management of speculative risks only.C) the management of pure risks that are uninsurable.D) the purchase

2、of insurance only.Answer: AQuestion Status： Previous Edition2) A situation or circumstance in which a loss is possible, regardless of whether a loss occurs, is called aA) deductible.B) loss exposure.C) loss avoidance.D) peril. Answer： BQuestion Status： Previous Edition3) All of the following are ris

3、k management objectives prior to the occurrence of loss EXCEPTA) analysis of the cost of different techniques for handling losses.B) continuing operations after a loss.C) reduction of anxiety.D) meeting externally imposed obligations.Answer： BQuestion Status： Previous Edition4) Preloss objectives of

4、 risk management include which of the following I. Preparing for potential losses in the most economical way.IL Reduction of anxiety.A) I onlyB) II onlyC) both I and IID) neither I nor IIAnswer： CQuestion Status： Previous Edition5) A risk manager is concerned with1. Identifying potential losses.IL S

5、electing the appropriate techniques for treating losses.A) I onlyB) II onlyC) both I and IID) neither I nor II Answer： CQuestion Status： Previous Edition6) Sources of information that can be used by a risk manager to identify pure loss exposures include all of the following EXCEPTA) risk analysis qu

6、estionnaires.B) currency exchange rates.C) physical inspections.D) past losses.Answer： BQuestion Status： Previous Edition7) Loss severity is defined as theA) probable size of the losses which may occur during some period.B) probable number of losses which may occur during some period.C) probability

7、that any particular piece of property may be totally destroyed.D) probability that a liability judgment may exceed a firm's net worth. Answer： A Question Status： Previous Edition8) Loss frequency is defined as theA) probable size of the losses that may occur during some period.B) probable number

8、 of losses that may occur during some period.C) probability that any particular piece of property may be totally destroyed.D) probability that a liability judgment may exceed a firm's net worth. Answer： B Question Status： Previous Edition9) The worst loss that could ever happen to a firm is refe

9、rred to as the A) maximum possible loss.B) probable maximum loss.C) frequency of loss.D) severity of loss.Answer： A Question Status： Previous Edition10) The worst loss that is likely to happen is referred to as theA) maximum possible loss.B) probable maximum loss.C) frequency of loss.D) severity of

10、loss.Answer： BQuestion Status： Previous Edition11) All of the following statements about avoidance are true EXCEPTA) Certain loss exposures are never acquired.B) Certain loss exposures may be abandoned.C) The chance of loss for certain loss exposures may be reduced to zero.D) It can be used for any

11、loss exposure facing a firm.Answer： DQuestion Status： Previous Edition12) Abandoning an existing loss exposure is an example ofA) avoidance.B) retention.C) noninsurance transfer.D) insurance transfer.Answer： A Question Status： Previous Edition13) Which of the following conditions is (are) appropriat

12、e for using retention I. Losses are difficult to predict.IL The worst possible loss is not serious.A) I onlyB) II onlyC) both I and IID) neither I nor IIAnswer： B Question Status： Previous Edition14) Which of the following statements regarding the use of retention is (are) trueL Retention is best us

13、ed for loss exposures that have a low frequency and a high severity. IL A financially strong firm can have a higher retention level than a firm whose financial position is weak.A) I onlyB) II onlyC) both I and IID) neither I nor II Answer： BQuestion Status： Previous Edition15) All of the following s

14、tatements about captive insurers are true EXCEPTA) They may act as a profit center by insuring parties other than the parent company.B) They provide a way to obtain types of insurance that may be unavailable from commercial insurers.C) They increase the volatility of the parent company" s earni

15、ngs.D) They make it easier for a firm to have access to reinsurance. Answer： C Question Status： Previous Edition16) Which of the following statements about self-insurance is (are) true I. It is a form of planned retention.IL State law usually prohibits its use for workers compensation.A) I onlyB) II

16、 onlyC) both I and IID) neither I nor IIAnswer： AQuestion Status： Previous Edition17) All of the following are potential advantages of retention EXCEPTA) lower expenses.B) increased cash flow.C) encouragement of loss prevention.D) protection from catastrophic losses. Answer： DQuestion Status： Previo

17、us Edition18) A restaurant owner leased a meeting room at the restaurant to a second party. The lease specified that the second party, not the restaurant owner, would be responsible for any liability arising out of the use of the meeting room, and that the restaurant owner would be “held harmless

18、9;7 for any damages. The restaurant owners use of the hold-harmless agreement is an example of A) retention.B) self-insurance.C) insurance.D) noninsurance transfer. Answer： D Question Status： Previous Edition 19) All of the following are disadvantages of noninsurance transfers EXCEPTA) The party to

19、whom the potential loss is transferred may be unable to pay.B) The transfer may fail because the contract language is ambiguous.C) The only potential losses that can be transferred are those that are not commercially insurable.D) The noninsurance transfer may be costly.Answer： C Question Status： Pre

20、vious Edition 20) ABC Insurance retains the first $1 million of each property damage loss and purchases insurance for that part of any property loss that exceeds $1 million. The insurance for property losses above $1 million is called A) excess insurance.B) liability insurance.C) coinsurance.D) prim

21、ary insurance.Answer： A Question Status： Previous Edition21) Which of the following statements about the use of deductibles is (are) true I. They represent risk retention by insurance purchasers. IL They tend to increase the cost of adjusting small claims.A) I onlyB) II onlyC) both I and IID) neithe

22、r I nor II Answer: AQuestion Status： Previous Edition22) Which of the following statements about an excess insurance plan is trueA) The insurer does not participate in a loss until it exceeds the amount the firm has decided to retain.B) The insurer pays first up to some specified level; the insured

23、then pays all losses exceeding the insurer's retention level.C) Losses in excess of a specified amount are not covered.D) The insured and insurer share equally in any loss that occurs. Answer： A Question Status： Previous Edition23) Factors a risk manager must consider in selecting an insurer inc

24、lude which of the following I. The availability of risk management services.IL The financial strength of the insurer.A) I onlyB) II onlyC) both I and IID) neither I nor IIAnswer： C Question Status： Previous Edition24) An insurance policy specifically written and designed to meet the needs of an insu

25、rance purchaser is called a(n) A) manuscript policy.B) bureau policy.C) standard policy.D) excess policy. Answer： A Question Status： Previous Edition25) All of the following are disadvantages of using insurance in a risk management program EXCEPTA) There is an opportunity cost because premiums must

26、be paid in advance.B) Considerable time and effort must be spent selecting and negotiating coverages.C) It results in considerable fluctuations in earnings after losses occur.D) Attitudes toward loss control may become lax when losses are insured. Answer： C Question Status: Revised26) Which of the f

27、ollowing types of loss exposures may be appropriately handled through the purchase of insuranceI. High-frequency, low-severityIL Low-frequency, high-severityA) I onlyB) II onlyC) both I and IID) neither I nor II Answer： BQuestion Status： Previous Edition27) Which of the following types of loss expos

28、ures are best handled by the use of avoidanceA) low-frequency, low-severityB) low-frequency, high-severityC) high-frequency, low-severityD) high-frequency, high-severity Answer: DQuestion Status： Previous Edition28) Low-frequency, low-severity loss exposures are best handled byA) avoidance.B) retent

29、ion.C) insurance.D) noninsurance transfer. Answer： BQuestion Status： Previous Edition29) All of the following statements about the administration of a risk management program are true EXCEPTA) The risk manager is an important part of a firm s management team.B) A risk management policy statement can

30、 be used to educate top executives about the risk management process.C) If a risk management program is properly designed, periodic review of the program is unnecessary.D) In order to properly identify loss exposures, the risk manager needs the cooperation of other departments.Answer： C Question Sta

31、tus： Previous Edition 30) Cal was just hired as XYZ Company" s first risk manager. Cal would like to employ the risk man ageme nt p rocess. The first ste p in the p rocess Cal should follow is toA) evaluate poten tial losses faced by XYZ Company.B) formulate a treatme nt plan for XYZ Company

32、9;s loss exp osures.C) ide ntify poten tial losses faced by XYZ Company.D) imp leme nt and adm ini ster a risk man ageme nt plan for XYZ Company. An swer： CQuestion Status： Previous Edition 31) Members of Mid-South P etroleum Distributors, a trade group, had trouble obta ining affordable p olluti on

33、 liability in sura nee. The members formed a group cap tive that is exe mpt from many state laws that apply to other in surers. This group cap tive is called a(n) A) rein sura nee po ol.B) Lloyd,s associatio n.C) alie n in surer.D) risk rete nti on group.An swer: DQuestion Status： Previous Edition32

34、) Acme Company has three ide ntical manu facturi ng plan ts, one on the Texas Gulf Coast, one in souther n Alabama, and one in Florida- Each plant is valued at $50 millio n. Acme, s risk man ager is concerned about the damage which could be caused by a sin gle hurrica ne. The risk man ager believes

35、there is an extremely low p robability that a si ngle hurrica ne could destroy two or all three plants because they are located so far apart. What is the probable maximum loss associated with a sin gle hurrica ne A) $0 millio n B) $50 millio n C) $100 millio n D) $150 millio n An swer: BQuestion Sta

36、tus： Previous Edition33) Acme Company has three ide ntical manu facturi ng plan ts, one on the Texas Gulf Coast, one in souther n Alabama, and one in Florida. Each plant is valued at $50 millio n. Acme" s risk man ager is concerned about the damage which could be caused by a sin gle hurrica ne.

37、 The risk man ager believes there is an extremely low p robability that a si ngle hurrica ne could destroy two or all three plants because they are located so far ap art. What is the maximum possible loss associated with a sin gle hurrica ne A) $0 millio n B) $50 millio n C) $100 millio n D) $150 mi

38、llio n An swer: DQuestion Status： Previous Edition34) Laura Evans is risk manager of LMN Company. Laura decided to retain certain property losses. All of the following are methods which Laura can use to fund retained property losses EXCEPT A) private insurance.B) current net income.C) funded reserve

39、.D) borrowed funds. Answer： A Question Status： Previous Edition35) 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 i

40、s (are) the appropriate risk management technique (s) to apply to this problem A) retentionB) loss control and retentionC) transfer through insuranceD) avoidanceAnswer： BQuestion Status： Previous Edition36) Barb, who is self-employed, is the main breadwinner for her family. Barb does not have disabi

41、lity income insurance because she has never stopped to consider the impact of a longterm 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) active retention. Answer： B Question Status： Previous Ed

42、ition37) Ryan decided to review his personal risk management program. His car is 10 years old, and he would receive little money from his insurer if the car was damaged or destroyed. Ryan decided to drop the physical damage insurance on the car. From a risk management perspective, dropping the physi

43、cal damage insurance on the car is best described as A)increasingtheuseofavoidance inthe riskmanagement program.B) increasingtheuseofnoninsurancetransferin the risk management program.C) increasingtheuseofretention inthe riskmanagement program.D) increasingtheuseofrisk controlin the risk management

44、program.Answer： CQuestion Status： Previous Edition38) To better understand her company" s operations, a risk manager asked a production manager to draw a diagram tracing the steps in the production and distribution of the company" s products. Such a diagram, which is useful in risk identif

45、ication, is called a A) financial statement.B) risk management matrix.C) flowchart.D) risk management audit.Answer： CQuestion Status： Previous Edition 39) In reviewing his company's operations, a risk manager noticed that all of the company" s finished goods were stored in a single warehous

46、e. The risk manager recommended that the finished goods be divided among three warehouses to prevent all of the finished goods from being destroyed by the same peril. Dividing the finished goods among three warehouses illustrates A) risk avoidance.B) risk control.C) insurance.D) noninsurance transfe

47、r.Answer： B Question Status： Previous Edition40) Which of the following statements about a personal risk management program is (are) true L Insurance and retention are the only techniques used to handle potential losses. IL The steps in a personal risk management process are the same steps used by b

48、usinesses. A) I only B) II only C) both I and II D) neither I nor II Answer： BQuestion Status： Previous Edition41) Bev lives in the suburbs and works downtown. She drives to work, and her most direct route to work would require her to pass through an area where carjackings and drive-by- shootings ar

49、e common. Bev does not drive through this area. Instead, she uses a route which adds 10 minutes to her commute. Which risk management technique is Bev using with respect to the risk of injury while driving through the dangerous area A) noninsurance transfer B) avoidance C) passive retention D) loss

50、reduction Answer： B Question Status： Previous Edition42) Brenda identified all of the pure loss exposures her family faces. Then she analyzed these loss exposures, developed a plan to treat these risks, and implemented the plan. The process Brenda conducted is called A) personal insurance programmin

51、g.B) personal estate planning.C) personal financial planning.D) personal risk management.Answer： D Question Status： Previous Edition43) Which statement about a company, s cost of risk is (are) true I. Cost of risk includes insurance premiums and retained losses. IL Reducing the cost of risk increases profitability.A) I onlyB) II onlyC) both I and IID) neither I nor IIAnswer： CQuestion Status： Previous Edition44) A useful measure for an organization is the total of the organization, s expenditures for treating loss exposures including retained losses, loss control expenses,