FIN260
Risk Management & Insurance
Finals Exam(Qns & Ans)
2025
General Instructions
1. Read All Questions Carefully: Make sure you understand each question.
2. Time Management: You have a specific amount of time to complete the exam.
Keep an eye on the clock and pace yourself.
3. Allowed Materials: Only use materials that are explicitly allowed. Unauthorized
materials can lead to disqualification.
4. ANS Format: Follow the required format for your ANS. For example, multiple-
choice questions might need you to select the best ANS, while essay questions
require detailed responses.
5. Academic Integrity: Adhere to the university's honor code. Any form of cheating or
plagiarism is strictly prohibited.
6. Technical Requirements: Ensure your computer and internet connection are
stable. For online exams, you might need a webcam and microphone for proctoring
purposes.
7. Submission: Submit your ANS before the time expires. Late submissions might
not be accepted.
©2024/2025
,1. Which of the following is a primary objective of risk
management in an organization?
a) To eliminate all risks
b) To maintain risks at an acceptable level
c) To increase operational costs
d) To avoid all insurance policies
Correct ANS: b) To maintain risks at an acceptable
level
Rationale: Risk management aims to identify and
mitigate risks to a level that is acceptable for the
organization.
2. What is the primary purpose of a risk management
framework?
a) To minimize costs
b) To streamline the claims process
c) To provide a structured approach to managing risk
d) To eliminate the need for audits
©2024/2025
, Correct ANS: c) To provide a structured approach to
managing risk
Rationale: A risk management framework offers
guidelines and methodologies for identifying, assessing, and
responding to risks.
3. Which of the following best defines 'moral hazard'?
a) Increased risk due to negligence
b) The tendency to take risks when insulated from their
consequences
c) The risk of loss from the market movements
d) The risk associated with a decline in asset values
Correct ANS: b) The tendency to take risks when
insulated from their consequences
Rationale: Moral hazard refers to the situation where
parties take risks they would not take if they were fully
exposed to the consequences.
4. In the context of risk measurement, which of the
following is a quantitative method?
a) Expert judgment
b) Historical data analysis
©2024/2025
Risk Management & Insurance
Finals Exam(Qns & Ans)
2025
General Instructions
1. Read All Questions Carefully: Make sure you understand each question.
2. Time Management: You have a specific amount of time to complete the exam.
Keep an eye on the clock and pace yourself.
3. Allowed Materials: Only use materials that are explicitly allowed. Unauthorized
materials can lead to disqualification.
4. ANS Format: Follow the required format for your ANS. For example, multiple-
choice questions might need you to select the best ANS, while essay questions
require detailed responses.
5. Academic Integrity: Adhere to the university's honor code. Any form of cheating or
plagiarism is strictly prohibited.
6. Technical Requirements: Ensure your computer and internet connection are
stable. For online exams, you might need a webcam and microphone for proctoring
purposes.
7. Submission: Submit your ANS before the time expires. Late submissions might
not be accepted.
©2024/2025
,1. Which of the following is a primary objective of risk
management in an organization?
a) To eliminate all risks
b) To maintain risks at an acceptable level
c) To increase operational costs
d) To avoid all insurance policies
Correct ANS: b) To maintain risks at an acceptable
level
Rationale: Risk management aims to identify and
mitigate risks to a level that is acceptable for the
organization.
2. What is the primary purpose of a risk management
framework?
a) To minimize costs
b) To streamline the claims process
c) To provide a structured approach to managing risk
d) To eliminate the need for audits
©2024/2025
, Correct ANS: c) To provide a structured approach to
managing risk
Rationale: A risk management framework offers
guidelines and methodologies for identifying, assessing, and
responding to risks.
3. Which of the following best defines 'moral hazard'?
a) Increased risk due to negligence
b) The tendency to take risks when insulated from their
consequences
c) The risk of loss from the market movements
d) The risk associated with a decline in asset values
Correct ANS: b) The tendency to take risks when
insulated from their consequences
Rationale: Moral hazard refers to the situation where
parties take risks they would not take if they were fully
exposed to the consequences.
4. In the context of risk measurement, which of the
following is a quantitative method?
a) Expert judgment
b) Historical data analysis
©2024/2025
