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Final Exam RMI With Questions And 100% ALL DETAILED CORRECT ANSWERS
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JACKLINEFinal Exam RMI With Questions And 100% ALL DETAILED CORRECT ANSWERS
Terms in this set (309)
1/126
,Final Exam RMI
2/126
,Which of the following is a basic characteristic of hello
insurance?
A) pooling of losses
B) avoidance of risk
C) payment of intentional losses
D) certainty about specific losses that will occur
Answer: A
2
Which of the following is implied by the pooling
of losses?
A) sharing of losses by an entire group
B) inability to predict losses with any degree of
accuracy
C) substitution of actual loss for average loss
D) increase of objective risk
Answer: A
3
According to the law of large numbers, what
happens as the number of exposure units
increases?
A) Actual results will increasingly differ from
probable results.
B) Actual results will more closely approach
probable results.
C) Nondiversifiable risk will decrease.
D) Objective risk will increase.
Answer: B
4
According to the law of large numbers, what
should happen as an insurer increases the number
of units insured?
A) The amount the insurer expects to pay in claims
should decrease.
B) Underwriting expenses should decrease.
C) Actual results will more closely approach
expected results.
D) The insurer's profitability should become more
variable.
Answer: C
5
Final Exam
Characteristics of a fortuitous RMIwhich
loss include
3/126
, of the following?
The loss is certain to occur.
The loss occurs as a result of chance.
A) I only
B) II only
C) both I and II
D) neither I nor II
Answer: B
6
From the viewpoint of the insurer, all of the
following are characteristics of an ideally
insurable risk EXCEPT
A) The loss must be accidental.
B) The loss should be catastrophic.
C) The premium must be economically feasible.
D) There must be a large number of exposure
units.
Answer: B
7
From the standpoint of the insurer, which of the
following is a characteristic of an ideally insurable
risk?
A) The loss must be intentional.
B) There must be a small number of unique loss
exposures.
C) The chance of loss must be calculable.
D) The loss must be indeterminable.
Answer: C
8
Why is a large number of exposure units generally
required before a pure risk is insurable?
A) It prevents the insurer from losing money.
B) It eliminates intentional losses.
C) It minimizes moral hazard.
D) It enables the insurer to predict losses more
accurately.
Answer: D
9
The requirement that losses should be accidental
and unintentional in order to be insurable results
Final
in which of the following? Exam RMI
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