12. The evolution of risk management is traceable to

(a) the introduction of decision theory in business college curricula.

(b) systems safety in the aerospace program.

(c) the field of corporate insurance buying.

(d) all of the above.

13. Adverse selection

D

(a) is generally considered to be unavoidable.

(b) affects the accuracy of insurer's predictions.

(c) creates a random pattern of insured exposures.

(d) has little effect on the operation of the insurance mechanism.

14. Adverse selection is a term used to describe

(a) the choice of the wrong insurance to fit a specific need.

(b) an underwriting error on the part of an insurance company.

(c) the tendency of the poorer than average risks to seek insurance to a greater extent than do the better than average risks.

(d) a loss situation in which the chance of loss cannot be determined.

15. title insurance primarily provides protection against financial loss resulting from a defect in an insured title to an automobile.

Slect one

True

False

17. life insurance is designed to provide protections against two distinct risks: premature death and longevity

Slect one

True

False

19. The type of insurance that is characterized by individual equity and contractual arrangements is generally referred to as

(a) social insurance.

(b) private insurance.

(c) public guarantee insurance programs.

(d) public welfare insurance.

20. The largest of all government insurance programs in the United States is better known as

A.Railroad retirement, Disability and unemployment

A. Social Security

C. Obamacare

D. Medicaid

E. Medicare

21. Probability may be defined as

(a) a measure of the likelihood of an occurrence.

(b) a measure of the degree of uncertainty.

(d) the number of losses that occur annually.

(e) all of the above.

23. Casualty insurance is defined as insurance against loss by sickness or accidental bodily injury

Slect one

True

False

24. Property insurance policies typically exclude coverage for losses caused by war. This is because

a) the courts have defined the term war broadly.

(b) losses from war are potentially catastrophic.

(c) insuring war creates an adverse selection problem.

(d) none of the above