Section C Test Bank Risk Management Questions and Answers Updated 2026

Section C Test Bank-Risk
Management Questions and
Answers Updated 2026
Incorporating,BplayingBdownBdebtBandBliabilityBinsuranceBprovidesBaBmeansBtoB_____
__________

a.)BincreaseBprofits

b.)BreduceBrisks

c.)BlowerBexpenses

d.)BincreaseBworkingBcapitalB-BAnswerBB.)BreduceBrisks



AnBeconomicBdeviceBwherebyBanBindividualBsubstitutesBaBcertainBcost(premiums)BforB
anBuncertainBfinancialBriskBisBknownBasB_________

a.)Bdiversification

b.)Binsurance

c.)BriskBmanagement

d.)BuncertaintyB-BAnswerBB.)BInsurance



WhereBtheBprobabilityBofBanBeventBoccurringBcannotBbeBempiricallyBdeterminedBisBkn
ownBasB__________

a.)Buncertainty

b.)Bhedging

c.)Bdiversification

d.)BriskBmanagementB-BAnswerBa.)BUncertainty



EngagingBinBseveralBenterprisesBtoBprotectBagainstBriskBisBknownBasB________

a.)Buncertainty

b.)Bhedging

c.)Bdiversification

, d.)BriskBmanagementB-BAnswerBc.)BDiversification



TheBactBofBmanagingBorBcontrollingBexposureBtoBriskBinBorderBtoBmeetBpresentBobje
ctivesBisBknownBasB_________

a.)BriskBmanagement

b.)Bhedging

c.)Bdiversification

d.)BinsuranceB-BAnswerBa.)BRiskBmanagement



AByoungBfamilyBthatBjustBpurchasedBaBhomeBwithBborrowedBmoneyBshouldBconsiderB
whichBriskBmanagementBtool?B

a.)Bdiversification

b.)BhedgingBonBfutureBtrading

c.)BlifeBinsurance

d.)BestateBplanB-BAnswerBc.)BLifeBInsurance



LiabilityBinsuranceBisBusedBtoBprotectBagainstB______

a.)BcropBlessB

b.)BhailBdamage

c.)BlegalBaction

d.)BlivestockBdeathBlossB-BAnswerBc.)BLegalBAction



riskBmanagementBisBaBprocessBbyBwhichBaBbusinessB_______

a.)BIdentifiesBpotentialBriskBexposure,

b.)BPrioritizesBtheBriskBfacedBbyBtheBbusiness,

c.)BdevelopsBaBplanBtoBmitigateBtheBexposure

d.)BallBofBtheBaboveB-BAnswerBd.)B(AllBofBtheBAbove)

IdentifiesBpotentialBriskBexposure,

PrioritizesBtheBriskBfacedBbyBtheBbusiness,