Retention is the most appropriate treatment for a risk in which there is

• A. A probability of a low frequency but high severity of a loss
• B. A probability of a low frequency and low severity of a loss
• C. A probability of a high frequency and high severity of a loss
• D. A probability of a high frequency but low severity of a loss

Which of the following best defined the term peril?

• A. The cause of a loss
• B. A condition that increases the frequency/severity of a loss.
• C. Dishonesty or character defects that increase the frequency/severity of a loss
• D. a situation in which there are only the possibilities of a loss or no loss

An insured desires to have their antique car insured for a specific amount at the time the policy begins instead of for the ACV at the time of the loss. Which type of policy would be most useful in this situation?

• A. Valued
• B. Stated
• C. Prepared
• D. Traditional

While each of the following are accepted definitions of risk, which best describes risk as it is defined in this course?

• A. a situation involving exposure to danger
• B. uncertainty concerning the occurrence of a loss
• C. expose to harm
• D. possibility of injury