RMI NEW EXAM 1 WITH 100% CORRECTLY
ANSWERED QUESTIONS
There is a lot of debate regarding what people expect of their government.
Government's may redistribute income through which of the following:
I.Market intervention
II.Transfer payments
III.Taxation - ANSWER market intervention, transfer payments, and taxation
In module 1 we discussed the six steps of the risk management process. Risk (loss)
Reduction is aimed at:
A.Frequency
B.Severity
C.Both frequency and severity
D.Retention
E.None of the above - ANSWER severity
Which of the following make the "invisible hand mechanism" break down:
I. Positive Externalities
II. Pitfalls in Decision Making
III. Negative Externalities - ANSWER positive externalities, negative externalities
In module 1 we discussed the six steps of the risk management process. An
organization's most important post-loss objective is:
,A.Profitability
B.Survival
C.Social Activism
D.Retention
E.None of the above - ANSWER survival
Which term best describes the "information problem" where one party to a transaction
has more/better information about the risk than the other party?
A.Exposure
B.Peril
C.Legal Hazard
D.Adverse Selection
E.Moral Hazard - ANSWER adverse selection
Fed Ex & UPS have thousands of trucks on the road every day. Each of these trucks are:
A.An exposure
B.A peril
C.A hazard
D.Adverse Selection
E.Moral Hazard - ANSWER an exposure
Which of the following allows people to exchange a small certain payment for a larger
uncertain possibility of a loss, in other words, what makes insurance possible?
A.Expected Value
B.Standard Deviation
, C.Law of Large Numbers
D.All of the above
E.None of the above - ANSWER law of large numbers
Olivia is not careful with her laptop because she bought the insurance coverage on it.
Olivia's behavior is an example of:
A.Physical hazard
B.Moral hazard
C.Adverse Selection
D.Genetic Predisposition
E.Teenagerism - ANSWER moral hazard
In module 1 we discussed sources of risk. The possibility of a lawyer being sued
because of giving poor legal advice, is an example of which source of risk:
A.Personal
B.Property
C.Liability
D.Static
E.Dynamic - ANSWER liability
Avoiding risky activity is a method of:
A.Risk (loss) control
B.Risk (loss) financing
C.Internal risk reduction
D.Retention
ANSWERED QUESTIONS
There is a lot of debate regarding what people expect of their government.
Government's may redistribute income through which of the following:
I.Market intervention
II.Transfer payments
III.Taxation - ANSWER market intervention, transfer payments, and taxation
In module 1 we discussed the six steps of the risk management process. Risk (loss)
Reduction is aimed at:
A.Frequency
B.Severity
C.Both frequency and severity
D.Retention
E.None of the above - ANSWER severity
Which of the following make the "invisible hand mechanism" break down:
I. Positive Externalities
II. Pitfalls in Decision Making
III. Negative Externalities - ANSWER positive externalities, negative externalities
In module 1 we discussed the six steps of the risk management process. An
organization's most important post-loss objective is:
,A.Profitability
B.Survival
C.Social Activism
D.Retention
E.None of the above - ANSWER survival
Which term best describes the "information problem" where one party to a transaction
has more/better information about the risk than the other party?
A.Exposure
B.Peril
C.Legal Hazard
D.Adverse Selection
E.Moral Hazard - ANSWER adverse selection
Fed Ex & UPS have thousands of trucks on the road every day. Each of these trucks are:
A.An exposure
B.A peril
C.A hazard
D.Adverse Selection
E.Moral Hazard - ANSWER an exposure
Which of the following allows people to exchange a small certain payment for a larger
uncertain possibility of a loss, in other words, what makes insurance possible?
A.Expected Value
B.Standard Deviation
, C.Law of Large Numbers
D.All of the above
E.None of the above - ANSWER law of large numbers
Olivia is not careful with her laptop because she bought the insurance coverage on it.
Olivia's behavior is an example of:
A.Physical hazard
B.Moral hazard
C.Adverse Selection
D.Genetic Predisposition
E.Teenagerism - ANSWER moral hazard
In module 1 we discussed sources of risk. The possibility of a lawyer being sued
because of giving poor legal advice, is an example of which source of risk:
A.Personal
B.Property
C.Liability
D.Static
E.Dynamic - ANSWER liability
Avoiding risky activity is a method of:
A.Risk (loss) control
B.Risk (loss) financing
C.Internal risk reduction
D.Retention
