XCEL CHAPTER 2 EXAM 2025
QUESTIONS AND ANSWERS
An example of risk sharing would be?
A. Adding more security to a high-risk building
B. Choosing not to invest in the stock market
C. Doctors pooling their money to cover malpractice exposures
D. Buying an insurance policy to cover potential liabilities - ANS Doctors pooling their money
to cover malpractice exposures
Insurance represents the process of risk?
A. selection
B. avoidance
C. transference
D. assumption - ANS transference
How do insurers predict the increase of individual risks?
A. Law of large numbers
B. U.S. Census
C. Average mortality incidents
D. Experience of morbidity - ANS Law of large numbers
What is known as the immediate specific event causing loss and giving rise to risk?
A. Peril
B. Hazard
1 @COPYRIGHT THEBRIGHT 2025/2026
QUESTIONS AND ANSWERS
An example of risk sharing would be?
A. Adding more security to a high-risk building
B. Choosing not to invest in the stock market
C. Doctors pooling their money to cover malpractice exposures
D. Buying an insurance policy to cover potential liabilities - ANS Doctors pooling their money
to cover malpractice exposures
Insurance represents the process of risk?
A. selection
B. avoidance
C. transference
D. assumption - ANS transference
How do insurers predict the increase of individual risks?
A. Law of large numbers
B. U.S. Census
C. Average mortality incidents
D. Experience of morbidity - ANS Law of large numbers
What is known as the immediate specific event causing loss and giving rise to risk?
A. Peril
B. Hazard
1 @COPYRIGHT THEBRIGHT 2025/2026
