Top 80+ Solved Principles of Insurance MCQ Questions Answer
Q. If the most impossible event is assigned a value of zero, then most inevitable event is assigned a value
a. Of one
b. Between zero and one
c. Between zero to 10
d. Between 10 to 100
Q. Which of the statement are true? A. Risk retention and risk transfer are some of the techniques to manage risks. B. Implementation is one of the steps in risk management
a. Statement A.
b. Statement
c. Both the statements
d. Neither of the statements
Q. Which of the statements are true? A. Loss prevention and loss reduction mean different things. B. Risk maybe transferred by contract.
a. Statement A.
b. Statement
c. Both the statements
d. Neither of the statements
Q. Which of the statements is correct? A. The simplest way to deal with a risk is to avoid it. B. This technique is always possible and practical.
a. Statement A.
b. Statement
c. Both the statements
d. Neither of the statements
Q. Which of the statements is correct? A. One of the methods of risk retention is by way of voluntary excess or deductible available under the policy. B. Another method of retention of risk is to absorb small losses as normal operating expenses of business.
a. Statement A.
b. Statement
c. Both the statements
d. Neither of the statements
Q. When should a risk be avoided?
a. When the risk event has a low probability of occurrence and low impact
b. When the risk event is unacceptable -- generally one with a very high probability of Occurrence and high impact
c. When it can be transferred by purchasing insurance
d. A risk event can never be avoided
Q. Risk management can be defined as the art and science of _________ risk factors throughout the life cycle of a project.
a. Researching, reviewing, and acting on
b. Identifying, analyzing, and responding to
c. Reviewing, monitoring, and managing
d. Identifying, reviewing, and avoiding
Q. When a firm buys insurance to cover losses caused by riots, the firm is
a. Transferring risk.
b. Avoiding risk.
c. Assuming risk.
d. Reducing risk.
Q. Suppose a project has many hazards that could easily injure one or more persons and there is no method of avoiding the potential for damages. The project manager should consider __________ as a means of deflecting the risk.
a. Abandoning the project
b. Buying insurance for personal bodily injury
c. Establishing a contingency fund
d. Establishing a management reserve
Q. The cause of loss or a contigency that may cause a loss is known as--------------
a. Hazard
b. peril
c. Risk
d. Uncertainty
Q. Which of the following is the similarity between insurance and gambling:
a. The amount of loss to be paid is known before hand.
b. Promise to pay on the happening of the event
c. Both the parties win on happening of an event.
d. Both are enforceable at law.
Q. The business of insurance is related to protection of:
a. savings
b. status
c. profits
d. economic value of assets
Q. The concept of insurance is
a. to share losses by many
b. to make money out of death
c. to earn interest
d. to earn a status
Q. Insurance covers the risk of the most certain event -
a. Death of a person
b. protection of the childhood
c. protection of old age
d. all of the above
Q. Insurance cover
a. Protects assets
b. prevents loss
c. reduces the impact of loss
d. insures immortality