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XCEL Chapter 2 Review Practice Test.

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XCEL Chapter 2 Review Practice Test. An example of risk sharing would be? A. Adding more security to a high-risk building B. Choosing not to invest in the stock market C. Doctors pooling their money to cover malpractice exposures D. Buying an insurance policy to cover potential liabilities - CORRECT ANSWER Doctors pooling their money to cover malpractice exposures Insurance represents the process of risk? A. selection B. avoidance C. transference D. assumption - CORRECT ANSWER transference How do insurers predict the increase of individual risks? A. Law of large numbers B. U.S. Census C. Average mortality incidents D. Experience of morbidity - CORRECT ANSWER Law of large numbers What is known as the immediate specific event causing loss and giving rise to risk? A. Peril B. Hazard C. Loss factor D. Liability - CORRECT ANSWER Peril

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