CAIB 1 PRACTICE QUESTIONS (100)
QUESTIONS WITH CORRECT
ANSWERS 2025/2026
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 - correct answersd. 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 - correct answersb. 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 - correct
answersb. 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 - correct answersa. A contract
What are the 4 methods of dealing with risk? - correct answersAvoidance,
control,
retention,
transfer
A reduction in value is called a...
a. Loss
b. Unlucky situation
c. Claim
d. Transfer - correct answersa. 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 of object, legal capacity, genuine intention
d. Competent parties, consideration, warranty, and legal purpose - correct answersc.
Agreement, consideration, legality of object, legal capacity, genuine intention
The act of intentionally giving up some right or privilege is...
a. A representation
b. A transfer
c. A waiver
d. Subrogation - correct answersc. A waiver
QUESTIONS WITH CORRECT
ANSWERS 2025/2026
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 - correct answersd. 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 - correct answersb. 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 - correct
answersb. 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 - correct answersa. A contract
What are the 4 methods of dealing with risk? - correct answersAvoidance,
control,
retention,
transfer
A reduction in value is called a...
a. Loss
b. Unlucky situation
c. Claim
d. Transfer - correct answersa. 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 of object, legal capacity, genuine intention
d. Competent parties, consideration, warranty, and legal purpose - correct answersc.
Agreement, consideration, legality of object, legal capacity, genuine intention
The act of intentionally giving up some right or privilege is...
a. A representation
b. A transfer
c. A waiver
d. Subrogation - correct answersc. A waiver
