Nature of insurance-questions

Pure risk

A situation in which there is only a chance of loss or no loss is a

Increased chance of a loss because of an insured's dishonest tendencies

Moral hazard is described as the

A condition that may increase the likelihood of a loss occurring

A hazard can best be described as

Probability of loss is unknown

All of the following circumstances must be met for loss retention to be an effective risk management technique, except

The greater the number insured, the more accurately the insurer can predict losses and set up appropriate premiums

An insurer having a large number of similar exposure units is consider important because

Principle of Indemnity

Restoring an insured to the same condition as before a loss is known as

Law of large numbers

Which of the following best describes the statement "the more times an event is repeated, the more predictable the outcome becomes"?

Moral hazard

Which of the following describes the increase in the probability of a loss due to an insured's dishonest tendencies?

Speculative risk

Which of the following is a situation where there is a possibility of either a loss or a gain?

Loss exposure

Which of the following is any situation that presents the possibility of a loss?

Loss must be catastrophic

Which of the following is not an element of an insurable risk?

The cause of a loss

Which of the following is not considered definition of risk?

Hazard

Which of the following refers to a condition that may increase the chance of a loss?

Risk is eliminated

Which of the following would not be accomplish with the purchase of an insurance policy?

Pure risks is the only insurable risk

Which of these statements correctly describes risk?