CAIB 1 2026 FINAL EXAM READINESS PACK
COMPLETE QUESTION SET AND CORE TOPIC
SUMMARY
◉ List 3 Categories of Risk Answer: 1) Personal 2) Property 3)
Liability
◉ List 4 Types of Risk Management Techniques Answer: 1) Risk
Avoidance 2) Risk Retention 3) Risk Control 4) Risk Transfer
◉ Define "Risk Avoidance" Answer: To avoid doing something in
order to eliminate the chance of risk
◉ Define "Risk Retention" Answer: To self-insure or to pay for losses
themselves
◉ Define "Risk Control" Answer: To reduce the frequency or severity
of the loss
◉ Define "Risk Transfer" Answer: To shift the financial obligation to
someone better equipped to handle it (an insurance company)
◉ List 2 Types of Risks Answer: 1) Speculative Risk 2) Pure Risk
, ◉ Define "Speculative Risk" Answer: Chance of Financial Loss or
Financial Gain
◉ Define "Pure Risk" Answer: Chance of Financial Loss only
◉ What type of risk is insurable? Answer: Pure Risk
◉ What is a Contract? Answer: An agreement between 2 or more
parties that creates an obligation or do or not to do a specific thing
◉ List the 5 components of a contract Answer: 1) Agreement 2)
Consideration 3) Legality of Object 4) Legal Capacity 5) Genuine
Intention
◉ Define "Agreement" Answer: a meeting of the minds where an
offer has been made and accepted unconditionally
◉ Define "Consideration" Answer: the exchange of something of
value
◉ Define "Legality of Object" Answer: must be legal and cannot
violate the public good
COMPLETE QUESTION SET AND CORE TOPIC
SUMMARY
◉ List 3 Categories of Risk Answer: 1) Personal 2) Property 3)
Liability
◉ List 4 Types of Risk Management Techniques Answer: 1) Risk
Avoidance 2) Risk Retention 3) Risk Control 4) Risk Transfer
◉ Define "Risk Avoidance" Answer: To avoid doing something in
order to eliminate the chance of risk
◉ Define "Risk Retention" Answer: To self-insure or to pay for losses
themselves
◉ Define "Risk Control" Answer: To reduce the frequency or severity
of the loss
◉ Define "Risk Transfer" Answer: To shift the financial obligation to
someone better equipped to handle it (an insurance company)
◉ List 2 Types of Risks Answer: 1) Speculative Risk 2) Pure Risk
, ◉ Define "Speculative Risk" Answer: Chance of Financial Loss or
Financial Gain
◉ Define "Pure Risk" Answer: Chance of Financial Loss only
◉ What type of risk is insurable? Answer: Pure Risk
◉ What is a Contract? Answer: An agreement between 2 or more
parties that creates an obligation or do or not to do a specific thing
◉ List the 5 components of a contract Answer: 1) Agreement 2)
Consideration 3) Legality of Object 4) Legal Capacity 5) Genuine
Intention
◉ Define "Agreement" Answer: a meeting of the minds where an
offer has been made and accepted unconditionally
◉ Define "Consideration" Answer: the exchange of something of
value
◉ Define "Legality of Object" Answer: must be legal and cannot
violate the public good
