AINS 21 Practice 7-8 Exam Questions with
correct Answers 2025/2026 A+ Graded
100% Verified
An accurate measure of loss frequency is important because
A. Loss frequency is a major consideration in determining whether a flowchart is
required.
B. Loss frequency is a major consideration in determining whether a physical inspection
is necessary.
C. If loss frequency has been increasing, loss reduction methods will likely need to be
implemented.
D. The proper treatment of the loss exposure often depends on how frequently the loss is
expected to occur. - ANS- The proper treatment of the loss exposure often depends on
how frequently the loss is expected to occur.
Sound risk management benefits society in each of the following ways, EXCEPT:
Choose one answer.
A. Causing fewer disruptions in the economic and social environment
B. Increasing opportunity costs
C. Reducing the number of people dependent on society for support
D. Stimulating economic growth - ANS- Increasing opportunity costs
There have been several recent burglaries in Sally's neighborhood. Which one of the
following best describes a risk management technique and a corresponding example of
that technique that Sally should consider due to the recent increase in burglaries?
A. Separation, such as installing a new alarm system
B. Loss reduction, such as keeping doors and windows locked
C. Loss prevention, such as keeping doors and windows locked
D. Loss prevention, such as installing a safe in her home - ANS- Loss prevention, such
as keeping doors and windows locked
What will individuals gain as a benefit of applying sound risk management to automobile
loss exposures?
A. No future increases in insurance premiums
B. A loss free future
C. Economic growth
D. Greater peace of mind - ANS- Greater peace of mind
, In the selection of appropriate risk management techniques, financial management
decisions are often made with the objective of
A. Decreasing the worry factor.
B. Decreasing expenses.
C. Increasing the cost of risk.
D. Increasing operating efficiency. - ANS- Increasing operating efficiency
The use of a seatbelt while driving a car is an example of
A.Loss reduction.
B. Loss prevention.
C. Separation.
D. Avoidance. - ANS- Loss Reduction
Which one of the following is the goal of enterprise-wide risk management (ERM)?
A. Coordinate loss reduction efforts
B. Reduce risk management costs
C. Decentralize control of business decisions
D. Maximize the organization's value - ANS- Maximize the organization's value
Traditionally, the risk management professional's role has been associated with loss
exposures related to
A. Business risk.
B. Operational risk.
C. Pure risk.
D. Speculative risk. - ANS- Pure risk
Analyzing loss exposures requires
A. Understanding how a household or organization operates.
B. Estimating how large the losses may be and how often they may occur.
C. A physical inspection of all locations, operations, and maintenance routines.
D. Interviews and the analysis of a flowchart. - ANS- Estimating how large the losses
may be and how often they may occur
Risk management activities under the enterprise-wide risk management approach occur
at the
A. Business unit level.
B. Corporate level.
C. Departmental level.
D. Regional level. - ANS- Corporate level
When selecting the appropriate risk management techniques, financial management
decisions are typically made with the objective of
A. Decreasing the worry factor.
B. Increasing the cost of risk.
correct Answers 2025/2026 A+ Graded
100% Verified
An accurate measure of loss frequency is important because
A. Loss frequency is a major consideration in determining whether a flowchart is
required.
B. Loss frequency is a major consideration in determining whether a physical inspection
is necessary.
C. If loss frequency has been increasing, loss reduction methods will likely need to be
implemented.
D. The proper treatment of the loss exposure often depends on how frequently the loss is
expected to occur. - ANS- The proper treatment of the loss exposure often depends on
how frequently the loss is expected to occur.
Sound risk management benefits society in each of the following ways, EXCEPT:
Choose one answer.
A. Causing fewer disruptions in the economic and social environment
B. Increasing opportunity costs
C. Reducing the number of people dependent on society for support
D. Stimulating economic growth - ANS- Increasing opportunity costs
There have been several recent burglaries in Sally's neighborhood. Which one of the
following best describes a risk management technique and a corresponding example of
that technique that Sally should consider due to the recent increase in burglaries?
A. Separation, such as installing a new alarm system
B. Loss reduction, such as keeping doors and windows locked
C. Loss prevention, such as keeping doors and windows locked
D. Loss prevention, such as installing a safe in her home - ANS- Loss prevention, such
as keeping doors and windows locked
What will individuals gain as a benefit of applying sound risk management to automobile
loss exposures?
A. No future increases in insurance premiums
B. A loss free future
C. Economic growth
D. Greater peace of mind - ANS- Greater peace of mind
, In the selection of appropriate risk management techniques, financial management
decisions are often made with the objective of
A. Decreasing the worry factor.
B. Decreasing expenses.
C. Increasing the cost of risk.
D. Increasing operating efficiency. - ANS- Increasing operating efficiency
The use of a seatbelt while driving a car is an example of
A.Loss reduction.
B. Loss prevention.
C. Separation.
D. Avoidance. - ANS- Loss Reduction
Which one of the following is the goal of enterprise-wide risk management (ERM)?
A. Coordinate loss reduction efforts
B. Reduce risk management costs
C. Decentralize control of business decisions
D. Maximize the organization's value - ANS- Maximize the organization's value
Traditionally, the risk management professional's role has been associated with loss
exposures related to
A. Business risk.
B. Operational risk.
C. Pure risk.
D. Speculative risk. - ANS- Pure risk
Analyzing loss exposures requires
A. Understanding how a household or organization operates.
B. Estimating how large the losses may be and how often they may occur.
C. A physical inspection of all locations, operations, and maintenance routines.
D. Interviews and the analysis of a flowchart. - ANS- Estimating how large the losses
may be and how often they may occur
Risk management activities under the enterprise-wide risk management approach occur
at the
A. Business unit level.
B. Corporate level.
C. Departmental level.
D. Regional level. - ANS- Corporate level
When selecting the appropriate risk management techniques, financial management
decisions are typically made with the objective of
A. Decreasing the worry factor.
B. Increasing the cost of risk.
