XCEL Chapter 2 Exam Questions with
Complete Solutions2
Which of the following refers to a condition that may increase the chance of a loss? - ANSWERS-
Hazard
Which of the following is a circumstance in which there is a possibility of both a loss or a gain? -
ANSWERS-Speculative risk
A situation in which there is ONLY a chance of loss or no loss is a - ANSWERS-pure risk
Restoring an insured to the same condition as before a loss is known as - ANSWERS-Principle of
indemnity
Moral hazard is described as the - ANSWERS-increased chance of a loss because of an insured's
dishonest tendencies
Which of the following describes the statement "The more times an event is repeated, the more
predictable the outcome becomes"? - ANSWERS-Law of large numbers
Which type of risk is gambling? - ANSWERS-Speculative risk
Which of the following is NOT considered a definition of risk? - ANSWERS-The cause of a loss
Which of the following is NOT an element of an insurable risk? - ANSWERS-Loss must be
catastrophic
Complete Solutions2
Which of the following refers to a condition that may increase the chance of a loss? - ANSWERS-
Hazard
Which of the following is a circumstance in which there is a possibility of both a loss or a gain? -
ANSWERS-Speculative risk
A situation in which there is ONLY a chance of loss or no loss is a - ANSWERS-pure risk
Restoring an insured to the same condition as before a loss is known as - ANSWERS-Principle of
indemnity
Moral hazard is described as the - ANSWERS-increased chance of a loss because of an insured's
dishonest tendencies
Which of the following describes the statement "The more times an event is repeated, the more
predictable the outcome becomes"? - ANSWERS-Law of large numbers
Which type of risk is gambling? - ANSWERS-Speculative risk
Which of the following is NOT considered a definition of risk? - ANSWERS-The cause of a loss
Which of the following is NOT an element of an insurable risk? - ANSWERS-Loss must be
catastrophic
