Exam
Name___________________________________
MULTIPLE CHOICE. Choose the one alternative that best completes the
statement or answers the question.
1) The three steps in risk management are 1) _______
A) assessment, formulation, and implementation.
B) realization, response, and reaction.
C) recognition, evaluation, and insurance.
D) evaluation, qualification, and litigation.
E) identification, evaluation, and response.
2) Alpha Corp has discovered that one of its products is potentially dangerous. It
therefore has purchased liability insurance. It has employed a form of risk
management known as 2) _______
A) risk acceptance.
B) risk avoidance.
C) risk elimination.
D) risk capitalization.
E) risk shifting.
3) Betta Inc has discovered that one of its products is potentially dangerous. It
therefore pulled that product from the store shelves before any were sold. It has
employed a form of risk management known as 3) _______
A) risk destruction.
B) risk denial.
C) risk acceptance.
D) risk avoidance.
E) risk reduction.
, 4) Gamma Co has discovered that one of its products is potentially dangerous. That
danger, however, is not great. There is only a small chance that someone will be
hurt, and even if someone is hurt, the injury will not be life-threatening. Gamma Co
therefore has decided to do nothing about the danger. It has employed a form of risk
management known as 4) _______
A) risk aversion.
B) risk acceptance.
C) risk harmonization.
D) risk displacement.
E) risk ignorance.
5) In an effort to increase sales, Delta Ltd hired Chandra, a marketing expert.
Because Delta was concerned about being held responsible for any torts that
Chandra might commit, it arranged to hire her as an independent contractor, rather
than an employee. It has employed a form of risk management known as 5)
_______
A) risk shifting.
B) vicarious liability.
C) incorporation.
D) independent responsibility.
E) risk allowance.
6) Epsilon Inc has recently retained the services of Noriko as in-house counsel.
Which of the following statements is most likely TRUE? 6) _______
A) Noriko can both help to resolve legal problems and help to prevent legal
problems from arising in the first place .
B) Epsilon Inc has hired Noriko for the purpose of resolving a single legal problem
that it expects will drag on for several years.
C) Although Noriko is not an employee of Epsilon Inc, she can be called in from her
law firm whenever the company has a legal problem.
, D) Noriko may provide advice to Epsilon, but she cannot represent the company in
court.
E) Epsilon Inc has probably made a mistake because, like most in-house counsel,
Noriko is probably available because she cannot find work in a law firm.
7) Which of the following statements is TRUE with respect to risk management and
incorporation? 7) _______
A) Incorporation is irrelevant to risk management because corporations cannot be
held liable
B) Incorporation spreads the risk of liability because if one corporation becomes
liable, every other corporation in the same province may be required to pay the
debt.
C) Incorporation completely eliminates the risk of liability because the government
is responsible for a corporation's debts.
D) Incorporation reduces the risk of liability because the doctrine of limited liability
usually means that a corporation's debts must be paid by the corporation and not by
the people who run the corporation.
E) Incorporation increases the risk of liability because a shareholder of a
corporation is personally liable for all of the corporation's torts.
8) Which of the following statements is TRUE with respect to exclusion clauses and
risk management? 8) _______
A) An exclusion clause can affect liability for property damage, but not for personal
injury.
B) An exclusion clause can be used by a person, but not by a corporation.
C) An exclusion clause represents a type of risk acceptance.
D) An exclusion clause can be inserted into a contract for the sale of goods.
E) An exclusion clause always shifts the risk of liability onto an insurance company.
9) Techniques for managing risks include 9) _______
A) independent contractors, exclusion clauses, and residual powers.
B) incorporation, insurance, and exclusion clauses.
C) exclusion clauses, negligence, and contract.
, D) vicarious liability, employment, and the Charter.
E) insurance and incorporation, but not exclusion clauses.
10) Red River Inc, which is based in Winnipeg, Manitoba, has sued a company called
Eiffel Tours, which is based in Paris, France. That dispute will be decided by the
"common law." That most likely means that the case will be decided by10) ______
A) a legal system that can be traced to England.
B) the provision of a statute.
C) a legal system that can be traced to France.
D) a law that is frequently applied in both France and Manitoba.
E) a government official, other than a judge.
11) Which of the following statements is TRUE with respect to the law of Quebec?
11) ______
A) Even though Quebec inherited much of its law from France, it uses some of the
same laws that apply in other parts of Canada.
B) Quebec is considered a common law jurisdiction because it inherited laws that
were once common to all parts of the Roman empire.
C) because Quebec inherited its laws from France, its constitutional laws are
different from those that apply in other parts of Canada
D) because Quebec inherited its laws from France, its criminal laws are different
from those that apply in other parts of Canada
E) Quebec is considered a common law jurisdiction because it inherited most of its
laws from England.
12) Eric, who is a resident of Saskatchewan, has sued Trois Etoiles Ltd, which is a
company based in Quebec, for breach of contract. Which of the following statements
is TRUE? 12) ______
A) The case would be classified as a "criminal matter" if Eric sued the government of
Quebec rather than the Quebec company.
B) The case can be classified as a "civil matter" under the "common law" if it is
Name___________________________________
MULTIPLE CHOICE. Choose the one alternative that best completes the
statement or answers the question.
1) The three steps in risk management are 1) _______
A) assessment, formulation, and implementation.
B) realization, response, and reaction.
C) recognition, evaluation, and insurance.
D) evaluation, qualification, and litigation.
E) identification, evaluation, and response.
2) Alpha Corp has discovered that one of its products is potentially dangerous. It
therefore has purchased liability insurance. It has employed a form of risk
management known as 2) _______
A) risk acceptance.
B) risk avoidance.
C) risk elimination.
D) risk capitalization.
E) risk shifting.
3) Betta Inc has discovered that one of its products is potentially dangerous. It
therefore pulled that product from the store shelves before any were sold. It has
employed a form of risk management known as 3) _______
A) risk destruction.
B) risk denial.
C) risk acceptance.
D) risk avoidance.
E) risk reduction.
, 4) Gamma Co has discovered that one of its products is potentially dangerous. That
danger, however, is not great. There is only a small chance that someone will be
hurt, and even if someone is hurt, the injury will not be life-threatening. Gamma Co
therefore has decided to do nothing about the danger. It has employed a form of risk
management known as 4) _______
A) risk aversion.
B) risk acceptance.
C) risk harmonization.
D) risk displacement.
E) risk ignorance.
5) In an effort to increase sales, Delta Ltd hired Chandra, a marketing expert.
Because Delta was concerned about being held responsible for any torts that
Chandra might commit, it arranged to hire her as an independent contractor, rather
than an employee. It has employed a form of risk management known as 5)
_______
A) risk shifting.
B) vicarious liability.
C) incorporation.
D) independent responsibility.
E) risk allowance.
6) Epsilon Inc has recently retained the services of Noriko as in-house counsel.
Which of the following statements is most likely TRUE? 6) _______
A) Noriko can both help to resolve legal problems and help to prevent legal
problems from arising in the first place .
B) Epsilon Inc has hired Noriko for the purpose of resolving a single legal problem
that it expects will drag on for several years.
C) Although Noriko is not an employee of Epsilon Inc, she can be called in from her
law firm whenever the company has a legal problem.
, D) Noriko may provide advice to Epsilon, but she cannot represent the company in
court.
E) Epsilon Inc has probably made a mistake because, like most in-house counsel,
Noriko is probably available because she cannot find work in a law firm.
7) Which of the following statements is TRUE with respect to risk management and
incorporation? 7) _______
A) Incorporation is irrelevant to risk management because corporations cannot be
held liable
B) Incorporation spreads the risk of liability because if one corporation becomes
liable, every other corporation in the same province may be required to pay the
debt.
C) Incorporation completely eliminates the risk of liability because the government
is responsible for a corporation's debts.
D) Incorporation reduces the risk of liability because the doctrine of limited liability
usually means that a corporation's debts must be paid by the corporation and not by
the people who run the corporation.
E) Incorporation increases the risk of liability because a shareholder of a
corporation is personally liable for all of the corporation's torts.
8) Which of the following statements is TRUE with respect to exclusion clauses and
risk management? 8) _______
A) An exclusion clause can affect liability for property damage, but not for personal
injury.
B) An exclusion clause can be used by a person, but not by a corporation.
C) An exclusion clause represents a type of risk acceptance.
D) An exclusion clause can be inserted into a contract for the sale of goods.
E) An exclusion clause always shifts the risk of liability onto an insurance company.
9) Techniques for managing risks include 9) _______
A) independent contractors, exclusion clauses, and residual powers.
B) incorporation, insurance, and exclusion clauses.
C) exclusion clauses, negligence, and contract.
, D) vicarious liability, employment, and the Charter.
E) insurance and incorporation, but not exclusion clauses.
10) Red River Inc, which is based in Winnipeg, Manitoba, has sued a company called
Eiffel Tours, which is based in Paris, France. That dispute will be decided by the
"common law." That most likely means that the case will be decided by10) ______
A) a legal system that can be traced to England.
B) the provision of a statute.
C) a legal system that can be traced to France.
D) a law that is frequently applied in both France and Manitoba.
E) a government official, other than a judge.
11) Which of the following statements is TRUE with respect to the law of Quebec?
11) ______
A) Even though Quebec inherited much of its law from France, it uses some of the
same laws that apply in other parts of Canada.
B) Quebec is considered a common law jurisdiction because it inherited laws that
were once common to all parts of the Roman empire.
C) because Quebec inherited its laws from France, its constitutional laws are
different from those that apply in other parts of Canada
D) because Quebec inherited its laws from France, its criminal laws are different
from those that apply in other parts of Canada
E) Quebec is considered a common law jurisdiction because it inherited most of its
laws from England.
12) Eric, who is a resident of Saskatchewan, has sued Trois Etoiles Ltd, which is a
company based in Quebec, for breach of contract. Which of the following statements
is TRUE? 12) ______
A) The case would be classified as a "criminal matter" if Eric sued the government of
Quebec rather than the Quebec company.
B) The case can be classified as a "civil matter" under the "common law" if it is
