FINA 307 Exam 1 ACTUAL UPDATED QUESTIONS AND CORRECT ANSWERS
(1) A condition that increases the change of a loss is C
called a(n)
a. direct loss
b. indirect (consequential) loss
c. hazard
d. peril
(1) A publishing company solicits manuscripts for A
publication. The publishing company is concerned that an
author might plagiarize material and that the person who
was plagiarized might sue the publisher. To address this
risk, the contract with the author includes a hold-
harmless agreement. Through this agreement, the author,
rather than the publisher, is held liable for plagiarism. In
this situation, the publisher is using the hold-harmless
agreement as what type of risk treatment measure?
a. risk transfer
b. risk retention
c. risk selection
d. risk avoidance
(1) A risk that affects the entire economy, or a large A
number of persons or groups within the economy, is
called a(n)
a. nondiversifiable risk
b. objective risk
c. diversifiable risk
d. speculative risk
, (1) All of the following are burdens of risk on society D
EXCEPT
a. risk deprives society of certain goods and services
b. risk requires funds to be set aside in case a loss occurs.
c. risk creates fear and worry.
d. risk forces individuals to practice loss control.
(1) Dean's Discount Store has been experiencing A
problems with shoplifting losses. Dean decided to install
a camera monitoring system and to use magnetic price
tags on products. If a tag is not demagnetized before the
product bearing the tag leaves the store, an alarm bell
sounds. These measures are examples of:
a. loss prevention
b. risk transfer
c. risk retention
d. risk avoidance
(1) An individual may commit an act that results in bodily D
injury or damage to someone's property. A court of law
may order the person responsible for the wrongful act to
pay damages to the party who was injured. This type of
risk is called the:
a. speculative risk
b. property risk
c. nondiversifiable risk
d. liability risk
(1) Kyle opened a sporting goods store. After a fire D
damaged the store, Kyle was forced to close the
business for four weeks while repairs were completed.
The loss of profits that could have been earned if the
business had remained open is best described as a(n):
a. direct loss
b. hazard
c. peril
d. indirect (consequential) loss
(1) The relative variation between expected losses and A
actual losses is called:
a. objective risk
b. objective probability
c. subjective probability
d. subjective risk
(1) A condition that increases the change of a loss is C
called a(n)
a. direct loss
b. indirect (consequential) loss
c. hazard
d. peril
(1) A publishing company solicits manuscripts for A
publication. The publishing company is concerned that an
author might plagiarize material and that the person who
was plagiarized might sue the publisher. To address this
risk, the contract with the author includes a hold-
harmless agreement. Through this agreement, the author,
rather than the publisher, is held liable for plagiarism. In
this situation, the publisher is using the hold-harmless
agreement as what type of risk treatment measure?
a. risk transfer
b. risk retention
c. risk selection
d. risk avoidance
(1) A risk that affects the entire economy, or a large A
number of persons or groups within the economy, is
called a(n)
a. nondiversifiable risk
b. objective risk
c. diversifiable risk
d. speculative risk
, (1) All of the following are burdens of risk on society D
EXCEPT
a. risk deprives society of certain goods and services
b. risk requires funds to be set aside in case a loss occurs.
c. risk creates fear and worry.
d. risk forces individuals to practice loss control.
(1) Dean's Discount Store has been experiencing A
problems with shoplifting losses. Dean decided to install
a camera monitoring system and to use magnetic price
tags on products. If a tag is not demagnetized before the
product bearing the tag leaves the store, an alarm bell
sounds. These measures are examples of:
a. loss prevention
b. risk transfer
c. risk retention
d. risk avoidance
(1) An individual may commit an act that results in bodily D
injury or damage to someone's property. A court of law
may order the person responsible for the wrongful act to
pay damages to the party who was injured. This type of
risk is called the:
a. speculative risk
b. property risk
c. nondiversifiable risk
d. liability risk
(1) Kyle opened a sporting goods store. After a fire D
damaged the store, Kyle was forced to close the
business for four weeks while repairs were completed.
The loss of profits that could have been earned if the
business had remained open is best described as a(n):
a. direct loss
b. hazard
c. peril
d. indirect (consequential) loss
(1) The relative variation between expected losses and A
actual losses is called:
a. objective risk
b. objective probability
c. subjective probability
d. subjective risk
