Term
Risk control measures include all of the following EXCEPT:
a. avoidance
b. separation
c. retention
d. prevention
e. Duplication |
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Definition
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Term
In a regression analysis, the variable that we are interested in predicting is called the:
Independent Variable
Dependent Variable
Indicator Variable
Random Variable |
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Definition
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Term
Litigation management, such as using arbitration, mediation or settling outside of the court, is an example of loss prevention?
True or False |
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Definition
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Term
| ABC company signs a contract with DEF company under which DEF agrees to build a commercial building for ABC company. XYZ company agrees to perform the job on behalf of DEF if DEF failed to perform tasks promised. Who is the surety and the principal in this case? |
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Definition
XYZ Company- surety
DEF- principal |
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Term
Purchasing raw materials from different suppliers represent which of the following risk management techniques?
Avoidance
Loss prevention
Self-insurance
Loss reduction |
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Definition
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Term
By purchasing insurance, a firm essentially lowers its taxable income in years when losses are low and increase taxable income in years when losses are high.
True or False |
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Definition
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Term
A firm with a lower current ratio will have greater capacity to retain.
True or False |
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Definition
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Term
Which of the following actions would increase the tax payment of a company?
Increase in insurance premium payments.
Recognition of depreciation on a new machine for accounting purposes.
Reduction in retained losses. |
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Definition
| Reduction in retained losses |
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Term
What is the probability that the next loss will be greater than $1196 if loss severity follows a normal distribution with mean=$1000 and SD=$100?
.01
.025
.05
.10 |
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Definition
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Term
| What is a statistically significant variable? |
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Definition
| The absolute value of T is >2; or P < .05 |
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Term
A regression coefficient is a point estimation of the relationship between the independent variable and the dependent variable. If we want to determine how confident we are about the point estimation, we should look at:
T stat
P-value
Confidence interval
Adjusted R-square |
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Definition
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Term
Transferring liability to another party through a waiver is an example of:
Loss prevention
Avoidance
risk control transfer
risk financing transfer |
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Definition
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Term
Which of the following policies will cover a claim filed in 2002 due to an injury caused by a detective product in 1998?
A 2002 claims made policy with a retroactive date of July 1, 1999.
A 1998 occurrence policy.
A 2002 occurrence policy. |
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Definition
| A 1998 occurrence policy. |
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Term
Which of the following is NOT an example of risk transfer:
Insurance
Hold harmless agreement
Captive
Exculpatory Clauses |
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Definition
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Term
Firms that care about liquidity will choose which of the following retention funding agreement?
No advance funding
Funded Reserve
Unfunded Reserve |
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Definition
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Term
Retro premiums are sensitive to an insured's loss history in the past couple of years.
True or False |
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Definition
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