Risk Management MCQ Questions and Answers for Practice

1. In ...............or ............... method a fixed share or quota of the risk is reinsured

1. Quota or fixed share treaty
2. excess of loss or quota
3. fixed share or surplus treaty
4. none of above

2. ...............happen when an insurance company has undertaken more risk burden on its shoulders than its bearing capacity. ................... is a device to reduce the risk

1. reinsurance, reinsurance
2. double insurance, reinsurance
3. double insurance , double insurance ,
4. reinsurance, double insurance

3. ...............refers to the cause of loss or the contingency that may cause a loss

1. Risk
2. Peril
3. Danger
4. Hazards

4. When a jewelry store locks its merchandise in a vault at the end of the day, it is practicing

1. risk reduction
2. risk avoidance
3. risk assumption
4. risk shifting

5. Which risk-management technique does self-insurance satisfy?

1. Risk reduction
2. Risk assumption
3. Risk avoidance
4. Shifting risks

6. A broken window pane is evidence of a

1. robbery
2. larceny
3. burglary
4. theft

7. Choosing not to ride in a car is an example of

1. shifting risks
2. risk reduction
3. risk avoidance
4. risk assumption

8. A consumer disputes redressal forum to be known as the ...............to be established by the ...............with the prior approval of the central government in each district of the state

1. state consumer protection , state government
2. District forum, district government
3. central council, local government
4. district forum, state government

9. Insurance that provides protection for a stated period of time is defined as ..................insurance

1. straight life
2. single-payment
3. term
4. limited-payment

10. ...............risk is defined as the relative variation of actual loss from expected loss

1. Subjective risk
2. Pure loss
3. Objective risk
4. Expected risk

11. What type of life insurance policy would you recommend for a young couple, with no children, that would provide the most protection for the smallest premium?

1. Term
2. Single-payment life
3. Whole life
4. Endowment

12. ...............is an essential part of the bailor-baliee relationship

1. The delivery of goods
2. The utmost good faith
3. The duty of full disclosure
4. All of above

13. According to ...............model, an insurance company markets its products almost exclusive through the distribution channel of its banking parents

1. the partnership model
2. the joint venture model
3. the captive model
4. none of above

14. which of the following is the main objective of IRDA

1. To take care of the policy holder interest
2. To open the insurance sector for private sectors
3. to supervise the activities of intermediaries
4. all of above

15. When a firm buys insurance to cover losses caused by riots, the firm is

1. transferring
2. using risk
3. avoiding risk
4. assuming risk