CAIB 1 Practice Questions (100) Exam 2026 – Updated Questions & Answers – Insurance Fundamentals

CAIB 1 Practice Questions
(100) EXAM (updated 2026)
Questions & Answers | Latest
Already Graded A+ UPDATE
|2026

Consideration is...

a. The law of insurance

b. A promise between parties

c. A contract's binding force


d. An exchange of something of value - ANSWER ✔✔d. An exchange

of something of value

,A stock company is...

a. A company that invests in other companies




b. A company owned by stockholders who provide the capital to start

and run the company




c. Is owned by customers of the company




d. A company that owns livestock - ANSWER ✔✔b. A company

owned by stockholders who provide the capital to start and run the

company

The difference between pure and speculative risk is...

a. Speculative risk is insurable but pure risk is not




b. Speculative risk means that there is a chance to gain or lose whereas

one can only lose with pure risk

, c. Speculative risk means that there is only the chance to lose whereas

pure risk means you have a chance to win too




d. Speculative risk is a term invented by marine insurance companies in

1864 - ANSWER ✔✔b. Speculative risk means that there is a chance

to gain or lose whereas one can only lose with pure risk

A legally enforceable agreement between 2 or more parties is defined

as...

a. A contract

b. An agreement

c. A will


d. A contract of consideration - ANSWER ✔✔a. A contract


What are the 4 methods of dealing with risk? - ANSWER

✔✔Avoidance,


control,

retention,

transfer



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