Self-Assessment Quiz

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Chapter 1

Self-Assessment Quiz

This activity contains 10 questions.

A condition that increases the chance of loss is called a(n)

indirect (consequential) loss. hazard.direct loss.peril.

A publishing company solicits manuscripts for publication. The publishing company is concerned that an author might plagiarize material and that the person who was plagiarized might sue the publisher. To address this risk, the contract with the author includes a hold-harmless agreement. Through this agreement, the author, rather than the publisher, is held liable for plagiarism. In this situation, the publisher is using the hold-harmless agreement as what type of risk treatment measure?

risk avoidance risk selection risk transfer risk retention

A risk that affects the entire economy, or a large number of persons or groups within the economy, is called a(n)

objective risk. particular risk. speculative risk. fundamental risk.

All of the following are burdens of risk on society EXCEPT

risk deprives society of certain goods and services.risk creates fear and worry. risk forces individuals to practice loss control.risk requires reserve funds to be set aside in case a loss occurs.

Dean’s Discount Store has been experiencing problems with shoplifting losses. Dean decided to install a camera monitoring system and to use magnetic price tags on products. If a tag is not demagnetized before the product bearing the tag leaves the store, an alarm bell sounds. These measures are examples of

risk retention. risk avoidance. loss control. risk transfer.

An individual may commit an act that results in bodily injury or damage to someone's property. A court of law may order the person responsible for the wrongful act to pay damages to the party who was injured. This type of risk is called the

property risk. liability risk. fundamental risk. speculative risk.

Kyle opened a sporting goods store. After a fire damaged the store, Kyle was forced to close the business for four weeks while repairs were completed. The loss of profits that could have been earned if the business had remained open is best described as a(n)

direct loss.indirect (consequential) loss.hazard.peril.

The relative variation between expected losses and actual losses is called

subjective risk.objective risk. objective probability. subjective probability.

Which of the following statements is (are) true with respect to pure risks?

Pure risks may produce either a profit or a loss.
Premature death and damage to property caused by a fire are pure risks.

II onlyI onlyneither I nor IIboth I and II

Which of the following statements is (are) true with respect to hazards?

Many physical hazards can be reduced through loss control measures.
Moral hazard is more serious than morale hazard.

I onlyboth I and IIneither I nor IIII only

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Self-Assessment Quiz

A condition that increases the chance of loss is called a(n)

A risk that affects the entire economy, or a large number of persons or groups within the economy, is called a(n)

All of the following are burdens of risk on society EXCEPT

An individual may commit an act that results in bodily injury or damage to someone's property. A court of law may order the person responsible for the wrongful act to pay damages to the party who was injured. This type of risk is called the

Kyle opened a sporting goods store. After a fire damaged the store, Kyle was forced to close the business for four weeks while repairs were completed. The loss of profits that could have been earned if the business had remained open is best described as a(n)

The relative variation between expected losses and actual losses is called

Which of the following statements is (are) true with respect to pure risks? Pure risks may produce either a profit or a loss. Premature death and damage to property caused by a fire are pure risks.

Which of the following statements is (are) true with respect to hazards? Many physical hazards can be reduced through loss control measures. Moral hazard is more serious than morale hazard.

Which of the following statements is (are) true with respect to pure risks?

Pure risks may produce either a profit or a loss.
Premature death and damage to property caused by a fire are pure risks.

Which of the following statements is (are) true with respect to hazards?

Many physical hazards can be reduced through loss control measures.
Moral hazard is more serious than morale hazard.