CAIB 1 Practice Questions (100) with Complete and Verified Answers

CAIB 1 Practice Questions (100) with Complete and Verified Answers 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 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 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 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 a. A contract What are the 4 methods of dealing with risk? Avoidance, control, retention, transfer A reduction in value is called a... a. Loss b. Unlucky situation c. Claim d. Transfer a. Loss What elements must be present to constitute a legal contract? a. Parties to the contract, the contract itself, consideration b. Parties to the contract, a written document, consideration, and legal purpose c. Agreement, consideration, legality