RMI Practice Exam Questions with all Correct & 100%
Verified Answers |Actual Complete Exam |Already
Graded A+
The definition of risk contains which important components:
I. Uncertainty
II. Economic loss
III. Premiums
a) I only
b) II only
c) III only
d) I and II
e) I and III
f) II and III
g) I, II, & III ✔Correct answer-d) I and II
Which of the following are considered "burdens" of risk:
a. Losses
b. Higher borrowing costs
c. Greater liquidity needs
d. All of the above
e. None of the above ✔Correct answer-d. All of the above
The cost of risk includes:
a. Outlays to reduce risk
b. Opportunity cost of forgone activities
c. Cost to finance potential losses
d. All of the above
e. None of the above ✔Correct answer-d. All of the above
A risk that has changes from year to year (e.g. oil prices):
a. Pure
b. Speculative
c. Static
d. Dynamic
e. Subjective ✔Correct answer-d. Dynamic
A risk that has only two outcomes (e.g. auto theft) loss or no loss is considered:
a. Pure
b. Speculative
c. Static
d. Dynamic
e. Subjective ✔Correct answer-a. Pure
A risk that affects a large portion of the population (e.g. economic downturn) all at once is
considered:
a. Static
b. Dynamic
, c. Objective
d. Fundamental
e. Particular ✔Correct answer-d. Fundamental
Examples of damages that could be paid as part of liability include:
a. Settlements to injured parties
b. Legal fees
c. Fines
d. All of the above
e. None of the above ✔Correct answer-d. All of the above
The definition of liability is:
a. The risk that a person loses their ability to generate income
b. The average loss amount adjusting for loss probability
c. The risk of being held financially liable for "damages" to another party
d. Funeral expenses
e. Medical expenses ✔Correct answer-c. The risk of being held financially liable for "damages" to
another party
Loss of income can be caused by:
I. Death
II. Injury/Illness
III. Unemployment
a) I only
b) II only
c) III only
d) I and II
e) I and III
f) II and III
g) I, II, & III ✔Correct answer-g) I, II, & III
Slippery or icy roads increasing the likelihood of an auto accident is an example of:
a. Moral hazard
b. Physical hazard
c. Risk
d. Peril
e. Asset exposed to loss ✔Correct answer-b. Physical hazard
The event that causes the loss is:
a. Moral hazard
b. Physical hazard
c. Risk
d. Peril
e. Asset exposed to loss ✔Correct answer-d. Peril
______________ is a behavior problem when a person changes their attitudes or behaviors because
they are insured.
a. Adverse selection
b. Moral hazard
c. Physical hazard
d. Peril
Verified Answers |Actual Complete Exam |Already
Graded A+
The definition of risk contains which important components:
I. Uncertainty
II. Economic loss
III. Premiums
a) I only
b) II only
c) III only
d) I and II
e) I and III
f) II and III
g) I, II, & III ✔Correct answer-d) I and II
Which of the following are considered "burdens" of risk:
a. Losses
b. Higher borrowing costs
c. Greater liquidity needs
d. All of the above
e. None of the above ✔Correct answer-d. All of the above
The cost of risk includes:
a. Outlays to reduce risk
b. Opportunity cost of forgone activities
c. Cost to finance potential losses
d. All of the above
e. None of the above ✔Correct answer-d. All of the above
A risk that has changes from year to year (e.g. oil prices):
a. Pure
b. Speculative
c. Static
d. Dynamic
e. Subjective ✔Correct answer-d. Dynamic
A risk that has only two outcomes (e.g. auto theft) loss or no loss is considered:
a. Pure
b. Speculative
c. Static
d. Dynamic
e. Subjective ✔Correct answer-a. Pure
A risk that affects a large portion of the population (e.g. economic downturn) all at once is
considered:
a. Static
b. Dynamic
, c. Objective
d. Fundamental
e. Particular ✔Correct answer-d. Fundamental
Examples of damages that could be paid as part of liability include:
a. Settlements to injured parties
b. Legal fees
c. Fines
d. All of the above
e. None of the above ✔Correct answer-d. All of the above
The definition of liability is:
a. The risk that a person loses their ability to generate income
b. The average loss amount adjusting for loss probability
c. The risk of being held financially liable for "damages" to another party
d. Funeral expenses
e. Medical expenses ✔Correct answer-c. The risk of being held financially liable for "damages" to
another party
Loss of income can be caused by:
I. Death
II. Injury/Illness
III. Unemployment
a) I only
b) II only
c) III only
d) I and II
e) I and III
f) II and III
g) I, II, & III ✔Correct answer-g) I, II, & III
Slippery or icy roads increasing the likelihood of an auto accident is an example of:
a. Moral hazard
b. Physical hazard
c. Risk
d. Peril
e. Asset exposed to loss ✔Correct answer-b. Physical hazard
The event that causes the loss is:
a. Moral hazard
b. Physical hazard
c. Risk
d. Peril
e. Asset exposed to loss ✔Correct answer-d. Peril
______________ is a behavior problem when a person changes their attitudes or behaviors because
they are insured.
a. Adverse selection
b. Moral hazard
c. Physical hazard
d. Peril
