UBM588 - Quiz Chapter 1 (A)

The following words -

i. Uncertainty

ii. The Degree of Risk

iii. Proximate Cause

are related to

• Elements of risk

• Elements of insurance

• Elements of loss

Answer explanation

Determined on the basis of historical data. It is about

• Priori Probability

• Judgemental Probability

• Empirical Probability

1. These statement -

2. i. Large number of similar loss exposures.

ii. Random occurrence of losses.

iii. Loss exposures must be independent.

is about

• Probability Theories

• Judgemental Probability

• Law of large number

A _____ is a cause of loss.

• Peril

• Loss

• Hazard

The following statement is about -

i. the likelihood of an event happening ;

ii. the severity of the negative consequences of that event;

• Concepts

• Assets

• Risks

"It affects the entire economy or a large number of persons or groups within the economy. "

This statement is about nature of _______.

• Speculative Risk

• Financial Value Risk

• Fundamental Risk

Risk implies some form of ________ about an outcome in a given situation and normally the outcome will be unfavorable or undesirable.

• uncertainty

• usury

• speculation

These statement of hazard -

i. Failure in safeguarding own property

ii. Drive recklessly

iii. Unhealthy lifestyles

is about

• Morale Hazard

• Physical Hazard

• Moral Hazard

The following statements is about -

i. Direct loss;

ii. Indirect loss;

iii. Extra expenses.

• Personal Risks

• Property Risks

• Liability Risks

The following statements is about -

i. have a high frequency and low severity incidents;

ii. a low frequency and high severity incidents.

• Level of hazard

• Level of risk

• Level of dishonesty