RIBO: ENTRY LEVEL 1 QUESTIONS WITH 100 % CORRECT ANSWERS | VERIFIED

Risk - Answer-Chance of a loss Which type of risk is insured and why? - Answer-Pure risk, because speculative risk is comparable to gambling. 3 Ways risk (management) is dealt with? - Answer-REDUCE: preventative measures ASSUME/RETAIN: Self-insure TRANSFER: purchase insurance Which of the following is not a risk? A) Assume or retain risk B) Reduce the risk C) Doing nothing / avoiding the risk D) Transfer the risk - Answer-C) Doing nothing / avoiding the risk Insurer - Answer-Insurance company Stock Insurance company - Answer-Owned by shareholders Mutual insurance company - Answer-Owned by policyholders - Usually smaller, for Ex., One big claim can flux the premium. Once these companies become big they are titled stockholders. Co-operative associations - Answer-Not looking to consume profits, these policies are expected to be cheaper. Lloyd's of London - Answer-Not an insurance company but rather an insurance market. Ex. Syndicates are investors for things such as athletes legs, voices etc. High risk Vs. High reward. Insured - Answer-Who is covered.Named insured = policy holder (owner) What is not included in the general types of insurance? - Answer-Life and Health