1
CAIB 1-CHAPTER 1 NEWEST ACTUAL 2025/2026
WITH COMPLETRE QUESTIONS WITH ANSWERS.
CORRECT /VERIFIED/GRADED A+
Define "Risk" - (ANSWER)The chance of a financial loss to which the object of
insurance may be exposed to
List 3 Categories of Risk - (ANSWER)1) Personal 2) Property 3) Liability
List 4 Types of Risk Management Techniques - (ANSWER)1) Risk Avoidance 2) Risk
Retention 3) Risk Control 4) Risk Transfer
Define "Risk Avoidance" - (ANSWER)To avoid doing something in order to
eliminate the chance of risk
Define "Risk Retention" - (ANSWER)To self-insure or to pay for losses themselves
Define "Risk Control" - (ANSWER)To reduce the frequency or severity of the loss
Define "Risk Transfer" - (ANSWER)To shift the financial obligation to someone
better equipped to handle it (an insurance company)
List 2 Types of Risks - (ANSWER)1) Speculative Risk 2) Pure Risk
Define "Speculative Risk" - (ANSWER)Chance of Financial Loss or Financial Gain
, 2
Define "Pure Risk" - (ANSWER)Chance of Financial Loss only
What type of risk is insurable? - (ANSWER)Pure Risk
What is a Contract? - (ANSWER)An agreement between 2 or more parties that
creates an obligation or do or not to do a specific thing
List the 5 components of a contract - (ANSWER)1) Agreement 2) Consideration 3)
Legality of Object 4) Legal Capacity 5) Genuine Intention
Define "Agreement" - (ANSWER)a meeting of the minds where an offer has been
made and accepted unconditionally
Define "Consideration" - (ANSWER)the exchange of something of value
Define "Legality of Object" - (ANSWER)must be legal and cannot violate the
public good
Define "Legal Capacity" - (ANSWER)all parties must be competent and of sound
mind
Define "Genuine Intention" - (ANSWER)basic level of honesty
CAIB 1-CHAPTER 1 NEWEST ACTUAL 2025/2026
WITH COMPLETRE QUESTIONS WITH ANSWERS.
CORRECT /VERIFIED/GRADED A+
Define "Risk" - (ANSWER)The chance of a financial loss to which the object of
insurance may be exposed to
List 3 Categories of Risk - (ANSWER)1) Personal 2) Property 3) Liability
List 4 Types of Risk Management Techniques - (ANSWER)1) Risk Avoidance 2) Risk
Retention 3) Risk Control 4) Risk Transfer
Define "Risk Avoidance" - (ANSWER)To avoid doing something in order to
eliminate the chance of risk
Define "Risk Retention" - (ANSWER)To self-insure or to pay for losses themselves
Define "Risk Control" - (ANSWER)To reduce the frequency or severity of the loss
Define "Risk Transfer" - (ANSWER)To shift the financial obligation to someone
better equipped to handle it (an insurance company)
List 2 Types of Risks - (ANSWER)1) Speculative Risk 2) Pure Risk
Define "Speculative Risk" - (ANSWER)Chance of Financial Loss or Financial Gain
, 2
Define "Pure Risk" - (ANSWER)Chance of Financial Loss only
What type of risk is insurable? - (ANSWER)Pure Risk
What is a Contract? - (ANSWER)An agreement between 2 or more parties that
creates an obligation or do or not to do a specific thing
List the 5 components of a contract - (ANSWER)1) Agreement 2) Consideration 3)
Legality of Object 4) Legal Capacity 5) Genuine Intention
Define "Agreement" - (ANSWER)a meeting of the minds where an offer has been
made and accepted unconditionally
Define "Consideration" - (ANSWER)the exchange of something of value
Define "Legality of Object" - (ANSWER)must be legal and cannot violate the
public good
Define "Legal Capacity" - (ANSWER)all parties must be competent and of sound
mind
Define "Genuine Intention" - (ANSWER)basic level of honesty
