AINS 21 practice exam.pdf file:///C:/Users/HP/Desktop/eewwww/AINS%2021%20practice%20e
AINS 21 PRACTICE EXAM
1. when selecting a distribution channel, which one of the following is impor- tant
consideration with regard to customer needs and characteristics
ANS
2. Which of the following statements is correct regarding characteristics of ideally
insurable loss exposures
ANS ideally, loss exposures should be spread across a large number of similar exposure units
within the same period
3. The type of insurance that provides periodic income payments to an insured who is
unable to work because of sickness or injury is
ANS Disability income insurance
4. Retention is often used in combination with insurance as a way of treating loss
exposures. One of the major downsides of individuals using retention alone is
ANS The potential for financial ruin
5. A loss exposure is
ANS Any condition that presents the possibility of a loss
1 of 77 8/2/2024, 3:57
,AINS 21 practice exam.pdf file:///C:/Users/HP/Desktop/eewwww/AINS%2021%20practice%20e
6. Liability coverage for loss exposures arising from a business organizations premises and
operations, its products, or its completed work is typically provided by
ANS Commercial general liability insurance
7. Though premiums are an obvious cost of insurance, many insureds believe that are too
high because
ANS Benefits are intangible until loss occurs
8. Insurance is not the only risk management transfer technique. When circum- stances are
appropriate, transfer can be accomplished through
ANS noninsurance transfer technique
9. Which one of the following is an example of a fortuitous loss
ANS An unknown vandal spray-paints graffiti on the insured's garage
10. Which one of the following statements is correct regarding the benefits that
insurance provides
ANS Investment income helps keep insurance premiums at a reasonable level
11. Claim buildup is considered to be among which one of the following costs of insurance
ANS increased losses
12. The primary role of insurance is to
ANS indemnify individuals and organizations for covered losses
2 of 77 8/2/2024, 3:57
,AINS 21 practice exam.pdf file:///C:/Users/HP/Desktop/eewwww/AINS%2021%20practice%20e
13. Coverage for money, securities, and other property from various causes of loss such
as burglary, robbery, theft, and employee dishonesty typically is provided by
ANS commercial crime insurance
14. Which of the following is an opportunity cost of insurance
ANS An insureds funds that could be invested elsewhere if purchasing insurance were not
necessary
15. Coverage for miscellaneous types of property such as movable property, goods in
domestic transit, and property use in transportation and communi- cation, typically is
provided by
ANS inland marine insurance
16. For insurers to utilize pooling most effectively and prevent catastrophic losses, the
insured exposure units need to be
ANS independent
3 of 77 8/2/2024, 3:57
,AINS 21 practice exam.pdf file:///C:/Users/HP/Desktop/eewwww/AINS%2021%20practice%20e
17. Some loss exposures are not easy to retain, avoid, or control. What risk management
techniques is frequently used to treat such exposures
ANS transfer
18. Sometimes the existence of insurance encourages losses. the result of this phenomenon
is that in
ANS increases the total cost of insurance
19. Pravalt Construction Company pays less than its competitors for workers
compensation insurance because Pravalt has had substantially fewer em- ployee injuries
than other firms in its class. this illustrates which one of the following benefits of
insurance
ANS promote risk control
20. As a single mother on a very tight budget, Ciara is tempted to skimp on her insurance.
However, her friend Mehmet tells her not to skimp on insurance, be- cause it will help
manage her cash flows.Which one of the following examples best illustrates Mehmet's
point
ANS When her car's windshield breaks, Ciara has to pay only $100 of the $600 cost of replacing
it
4 of 77 8/2/2024, 3:57
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller TIPSCORE. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.99. You're not tied to anything after your purchase.
