Insurance and Risk Management 6

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Objective Questions and Answers of MBA: Insurance and Risk Management 6

Subject: Objective Questions and Answers of MBA: Insurance and Risk Management 6

Part 6: Objective questions and answers of Insurance and Risk Management


Q1. The number of prime elements of risk analysis is ______________.

a) One

b) Two

c) Three

d) Four


Q2. 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


Q3. Risk management information is not useful in one of the following ______________.

a) Reporting

b) Hedging

c) Claim adjustment process reviews

d) Derivatives


Q4. The principle of indemnity does not apply to ______________.

a) Burglary insurance

b) Fire insurance

c) Marine insurance

d) Life and personal accident insurance


Q5. ______________ are those terms, which are written on the policy.

a) Express warranties

b) Implied warranties

c) Memorandum warranties

d) Valuation clause


Q6. ______________ means a willful and intentional act on part of the self-destroyed.

a) Death

b) Suicide

c) Murder

d) Accident


Q7. If the most impossible event is assigned a value of zero, then most inevitable event is assigned a value ______________.

a) One

b) Between zero and one

c) Between zero to 10

d) Between 10 to 10


Q8. The risk management methods are ______________

a) Insurance

b) Hedging

c) Derivatives

d) All of the above


Q9. 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


Q10. Medical expenses risk comes under?

a) Business risk

b) Price risk

c) Credit risk

d) Personal risk


Q11. A risk manager should report to ______________

a) Managing director

b) Company secretary

c) Supervisor

d) General manager


Q12. 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


Q13. Risk management is concerned with ______________.

a) Planning

b) Arranging and controlling of activities

c) Managing of funds

d) Planning, arranging and controlling of activities


Q14. Those 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


Q15. 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


Q16. The routine medical checkup during a year is an example of ______________.

a) Loss prevention

b) Loss reduction

c) Risk avoidance

d) Retention


Q17. Insurance is based on the principle of ______________.

a) Co-operation

b) Democracy

c) Equality

d) Welfare


Q18. Notice of abandonment is necessary in the case of ______________.

a) Actual loss

b) Constructive total loss

c) Partial total loss

d) Minimum loss


Q19. ________________ provides evidence of insurance to the policies and registration authorities under motor vehicle act.

a) Cover note

b) Endorsements

c) Certificate of insurance

d) Policy form


Q20. Insurance business is based on ______________.

a) Parkinsons law

b) Newtons law

c) The theory of probability and law of large numbers

d) Boyles law


Part 6: Objective questions and answers of Insurance and Risk Management


Q1. Answer b


Q2. Answer d


Q3. Answer b


Q4. Answer d


Q5. Answer a


Q6. Answer b


Q7. Answer a


Q8. Answer d


Q9. Answer b


Q10. Answer d


Q11. Answer c


Q12. Answer c


Q13. Answer d


Q14. Answer a


Q15. Answer c


Q16. Answer a


Q17. Answer a


Q18. Answer b


Q19. Answer c


Q20. Answer c

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