CAIB 1 Practice Questions
(100) Comprehensive
Questions (Frequently
Tested) with Verified
Answers Graded A+
[Document subtitle]
[DATE]
[COMPANY NAME]
[Company address]
, Contact for further consultation
1. 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
2. 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
3. The difference between pure and speculative risk is...
, Contact for further consultation
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
4. 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
, Contact for further consultation
5. What are the 4 methods of dealing with risk?
Answer: Avoidance, control,
retention,
transfer
6. A reduction in value is called a...
a. Loss
b. Unlucky situation
c. Claim
d. Transfer Answer: a. Loss
7. 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 pur- pose
c. Agreement, consideration, legality of object, legal capacity,
genuine inten- tion
(100) Comprehensive
Questions (Frequently
Tested) with Verified
Answers Graded A+
[Document subtitle]
[DATE]
[COMPANY NAME]
[Company address]
, Contact for further consultation
1. 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
2. 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
3. The difference between pure and speculative risk is...
, Contact for further consultation
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
4. 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
, Contact for further consultation
5. What are the 4 methods of dealing with risk?
Answer: Avoidance, control,
retention,
transfer
6. A reduction in value is called a...
a. Loss
b. Unlucky situation
c. Claim
d. Transfer Answer: a. Loss
7. 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 pur- pose
c. Agreement, consideration, legality of object, legal capacity,
genuine inten- tion
