| 1. |
Largest Life Insurance Company in India is: |
| A. | The New India Assurance Company Limited |
| B. | Life Insurance Corporation of India (LIC) |
| C. | United India Insurance Company Limited |
| D. | National Insurance Company Limited |
| Answer» B. Life Insurance Corporation of India (LIC) | |
| 2. |
The term risk may be defined as: |
| A. | The possibility of adverse results flowing from any occurrence. |
| B. | The possibility of an outcome being different from the expected one. |
| C. | Both a and b |
| D. | None of the above |
| Answer» C. Both a and b | |
| 3. |
Risk of premature death is a |
| A. | Financial risk |
| B. | Personal risk |
| C. | Dynamic risk |
| D. | Subjective risk |
| Answer» B. Personal risk | |
| 4. |
Insurance is a risk management technique involving: |
| A. | Risk retention |
| B. | Risk avoidance |
| C. | Loss control |
| D. | Risk transfer |
| Answer» D. Risk transfer | |
| 5. |
Organisations are mainly concerned with managing |
| A. | Pure risks |
| B. | Speculative risks |
| C. | Personal risks |
| D. | None of the above |
| Answer» A. Pure risks | |
| 6. |
The first step in risk management process is |
| A. | Risk avoidance |
| B. | Risk identification |
| C. | Insurance |
| D. | Risk evaluation |
| Answer» D. Risk evaluation | |
| 7. |
Main emphasis of risk management is on ___________. |
| A. | Risk retention |
| B. | Reduction of cost of handling risk |
| C. | Risk transfer |
| D. | all |
| Answer» B. Reduction of cost of handling risk | |
| 8. |
Cost of loss control is |
| A. | cost of reducing frequency and severity of loss |
| B. | cost of paying workers compensation |
| C. | cost of self-insurance |
| D. | all |
| Answer» A. cost of reducing frequency and severity of loss | |
| 9. |
Following are the risk management methods: |
| A. | Insurance |
| B. | Hedging |
| C. | Derivatives |
| D. | All of the above |
| Answer» D. All of the above | |
| 10. |
Which of the following types of risks best meets the requirements for being insurable by private insurers? |
| A. | Market risks |
| B. | Property risks |
| C. | Financial risks |
| D. | Political risks |
| Answer» B. Property risks | |
| 11. |
All of the following are financial risks which may be faced by business organizations EXCEPT |
| A. | Interest rate risk. |
| B. | Commodity price risk. |
| C. | Product liability risk. |
| D. | Currency exchange rate risk. |
| Answer» C. Product liability risk. | |
| 12. |
Risk management follows a systematic process which involves……….steps. |
| A. | Two |
| B. | Three |
| C. | Four |
| D. | Five |
| Answer» D. Five | |
| 13. |
Risk management information system is not useful in one of the following |
| A. | Reporting |
| B. | Hedging |
| C. | Claim adjustment process review |
| D. | none |
| Answer» B. Hedging | |
| 14. |
Event of high frequency and low severity fall in the self-retention category |
| A. | True |
| B. | False |
| C. | none |
| D. | all |
| Answer» A. True | |
| 15. |
When as 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 |
| Answer» A. Zero and one | |
| 16. |
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 |
| Answer» D. Between 10 to 100 | |
| 17. |
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 B. |
| C. | Both the statements |
| D. | Neither of the statements |
| Answer» C. Both the statements | |
| 18. |
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 B. |
| C. | Both the statements |
| D. | Neither of the statements |
| Answer» B. Statement B. | |
| 19. |
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 B. |
| C. | Both the statements |
| D. | Neither of the statements |
| Answer» D. Neither of the statements | |
| 20. |
Which of the statements is correct?
|
| A. | Statement A. |
| B. | Statement B. |
| C. | Both the statements |
| D. | Neither of the statements |
| Answer» C. Both the statements | |
| 21. |
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 |
| Answer» B. When the risk event is unacceptable -- generally one with a very high probability of Occurrence and high impact | |
| 22. |
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 |
| Answer» A. Researching, reviewing, and acting on | |
| 23. |
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. |
| Answer» A. Transferring risk. | |
| 24. |
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 |
| Answer» B. Buying insurance for personal bodily injury | |
| 25. |
The cause of loss or a contigency that may cause a loss is known as-------------- |
| A. | Hazard |
| B. | peril |
| C. | Risk |
| D. | Uncertainty |
| Answer» D. Uncertainty | |