Choose the CORRECT answer for the following MCQs: Choose the correct statements with regard to insurance. 1. Regarding the characteristics of insurance, which of the following is/are fundamentals'? I. Probability (possibility and predictability of a loss) II. Law of large numbers III. Transfer of risk from individual to group IV. Insurance is a form of speculation a. I and II only. b. I, II and IV only. c. I, II and III only. d. IV only. 2. Adherence to the principle of indemnity means that: a. The insurer will pay the face amount of a life insurance policy, regardless of the cause of death b. The insured can profit from his or her insurance coverage if he or she has two identical fire insurance policies c. The insurer will reimburse the insured only to the extent of the insured's financial oss d. The insurer does not have to rely on the insured's representations contained in the application for insurance Mark and Madeline own a house valued at approximately $450,000 and an automobile valued at S65,000. The most practical method for this family to handle these exposures would be a. Avoidance of the exposures b. Hazard reduction and loss reduction c. Risk shifting or transfer d Risk reduction 3. 4. Which of the following statements concerning individual disability income policies is NOT correct? a. They usually contain a waiting or elimination period b. They usually cover both accidents and sickness c. They usually replace all of the disabled insured's lost earnings. d. They have more than one definition of disability