Question 1

_____ provides protection for an employee's estate when he or she dies while still in the income-producing years.

Accepted Answer

A)  Workers' compensation policy 
B)  Life insurance 
C)  Health insurance 
D)  Business insurance 
A)  Workers' compensation policy 
B)  Life insurance 
C)  Health insurance 
D)  Business insurance

Question 2

What is risk management? How can it help a firm?

Accepted Answer

Risk management is the process of conser

Question 3

When a business owner buys insurance, he or she is trading a potentially large but uncertain loss for a small but certain one.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is covered by business insurance?

Accepted Answer

A)  Health insurance of the employees 
B)  Loss from the use of a business's product 
C)  Economic loss to a business when a key employee dies 
D)  Loss to a business due to bankruptcy 
A)  Health insurance of the employees 
B)  Loss from the use of a business's product 
C)  Economic loss to a business when a key employee dies 
D)  Loss to a business due to bankruptcy

Question 5

_____ protects a business from losses due to suits resulting from mistakes made or bad advice given by someone in an official context.

Accepted Answer

A)  Professional liability insurance 
B)  Workers' compensation policy 
C)  Business interruption coverage 
D)  Surety bond 
A)  Professional liability insurance 
B)  Workers' compensation policy 
C)  Business interruption coverage 
D)  Surety bond

Question 6

Insurance companies treat large and small businesses alike.

Accepted Answer

A) True 
 B)False

Question 7

Sale of proprietary information is an example of _____.

Accepted Answer

A)  a blue-collar crime 
B)  risk transfer 
C)  a white-collar crime 
D)  risk avoidance 
A)  a blue-collar crime 
B)  risk transfer 
C)  a white-collar crime 
D)  risk avoidance

Question 8

_____ refers to setting aside funds to meet losses that are uncertain in size and frequency.

Accepted Answer

A)  Risk avoidance 
B)  Risk prevention 
C)  Risk transfer 
D)  Risk assumption 
A)  Risk avoidance 
B)  Risk prevention 
C)  Risk transfer 
D)  Risk assumption

Question 9

An extended-coverage endorsement multiplies the liability of small businesses.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is an effective technique for minimizing theft?

Accepted Answer

A)  Reduce the number of electronic noise activators. 
B)  Install wide-angle and one-way mirrors to observe employee or customer behavior. 
C)  Schedule higher inventory levels on weekends. 
D)  Institute a flatter organizational structure and replace the status quo. 
A)  Reduce the number of electronic noise activators. 
B)  Install wide-angle and one-way mirrors to observe employee or customer behavior. 
C)  Schedule higher inventory levels on weekends. 
D)  Institute a flatter organizational structure and replace the status quo.

Question 11

Which of the following defines speculative risk?

Accepted Answer

A)  It is the uncertainty that some unpredictable event will result in a loss. 
B)  It is the uncertainty that a voluntarily undertaken risk will result in a loss. 
C)  It is the refusal to undertake an activity when a chance taken seems too costly. 
D)  It is the possibility of a loss when the possible extent of the loss is unknown. 
A)  It is the uncertainty that some unpredictable event will result in a loss. 
B)  It is the uncertainty that a voluntarily undertaken risk will result in a loss. 
C)  It is the refusal to undertake an activity when a chance taken seems too costly. 
D)  It is the possibility of a loss when the possible extent of the loss is unknown.

Question 12

The possibility facing a small business that it will be unprofitable is an insurable risk.

Accepted Answer

A) True 
 B)False

Question 13

A liability judgment against an individual constitutes a pure risk.

Accepted Answer

A) True 
 B)False

Question 14

Risk avoidance entails the use of various methods aimed at reducing the probability that a given event will occur.

Accepted Answer

A) True 
 B)False

Question 15

What should owners of small businesses do to ensure the safety of their workers?

Accepted Answer

Workers' compensation policies typically

Question 16

_____ refers to using various methods to reduce the possibility of a loss occurring.

Accepted Answer

A)  Risk avoidance 
B)  Risk prevention 
C)  Risk transfer 
D)  Risk assumption 
A)  Risk avoidance 
B)  Risk prevention 
C)  Risk transfer 
D)  Risk assumption

Question 17

Key person insurance is rarely used in small firms.

Accepted Answer

A) True 
 B)False

Question 18

Key person insurance insures the lives of important employees.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following constitutes shoplifting?

Accepted Answer

A)  Sally, a young woman, stole an expensive brooch from a departmental store and hid it in her handbag. 
B)  Robert, a habitual offender, set fire to a shop owned by his rival's family. 
C)  Gina, an accountant, embezzled funds from her company's account. 
D)  Mark, a teenager, stole money from his mother's purse for buying cigarettes. 
A)  Sally, a young woman, stole an expensive brooch from a departmental store and hid it in her handbag. 
B)  Robert, a habitual offender, set fire to a shop owned by his rival's family. 
C)  Gina, an accountant, embezzled funds from her company's account. 
D)  Mark, a teenager, stole money from his mother's purse for buying cigarettes.

Question 20

The best-known form of risk transfer is insurance.

Accepted Answer

A) True 
 B)False

_____ provides protection for an employee's estate when he or she dies while still in the income-producing years.

What is risk management? How can it help a firm?

When a business owner buys insurance, he or she is trading a potentially large but uncertain loss for a small but certain one.

Which of the following is covered by business insurance?

_____ protects a business from losses due to suits resulting from mistakes made or bad advice given by someone in an official context.

Insurance companies treat large and small businesses alike.

Sale of proprietary information is an example of _____.

_____ refers to setting aside funds to meet losses that are uncertain in size and frequency.

An extended-coverage endorsement multiplies the liability of small businesses.

Which of the following is an effective technique for minimizing theft?

Which of the following defines speculative risk?

The possibility facing a small business that it will be unprofitable is an insurable risk.

A liability judgment against an individual constitutes a pure risk.

Risk avoidance entails the use of various methods aimed at reducing the probability that a given event will occur.

What should owners of small businesses do to ensure the safety of their workers?

_____ refers to using various methods to reduce the possibility of a loss occurring.

Key person insurance is rarely used in small firms.

Key person insurance insures the lives of important employees.

Which of the following constitutes shoplifting?

The best-known form of risk transfer is insurance.

Starting Your Small Business

Family-Owned Businesses

Forms of Ownership of Small Businesses

Maintaining Good Government Relations and Business Ethics

Becoming the Owner of a Small Business

Planning, Organizing, and Managing a Small Business

How to Obtain the Right Financing for Your Business

Developing Marketing Strategies

Promoting and Distributing

How to Obtain and Manage Human Resources and Diversity in Small Companies

How to Maintain Relationships With Your Employees and Their Representatives

Obtaining and Laying Out Operating Facilities

Purchasing, Inventory, and Quality Control

Basic Financial Planning

Budgeting and Controlling Operations and Taxes

Using Computer Technology in Small Businesses

Filters

Exam 17: Risk Management, Insurance, and Crime Prevention

_____ provides protection for an employee's estate when he or she dies while still in the income-producing years.

What is risk management? How can it help a firm?

When a business owner buys insurance, he or she is trading a potentially large but uncertain loss for a small but certain one.

Which of the following is covered by business insurance?

_____ protects a business from losses due to suits resulting from mistakes made or bad advice given by someone in an official context.

Insurance companies treat large and small businesses alike.

Sale of proprietary information is an example of _____.

_____ refers to setting aside funds to meet losses that are uncertain in size and frequency.

An extended-coverage endorsement multiplies the liability of small businesses.

Which of the following is an effective technique for minimizing theft?

Which of the following defines speculative risk?

The possibility facing a small business that it will be unprofitable is an insurable risk.

A liability judgment against an individual constitutes a pure risk.

Risk avoidance entails the use of various methods aimed at reducing the probability that a given event will occur.

What should owners of small businesses do to ensure the safety of their workers?

_____ refers to using various methods to reduce the possibility of a loss occurring.

Key person insurance is rarely used in small firms.

Key person insurance insures the lives of important employees.

Which of the following constitutes shoplifting?

The best-known form of risk transfer is insurance.

Starting Your Small Business

Family-Owned Businesses

Forms of Ownership of Small Businesses

Maintaining Good Government Relations and Business Ethics

Becoming the Owner of a Small Business

Planning, Organizing, and Managing a Small Business

How to Obtain the Right Financing for Your Business

Developing Marketing Strategies

Promoting and Distributing

How to Obtain and Manage Human Resources and Diversity in Small Companies

How to Maintain Relationships With Your Employees and Their Representatives

Obtaining and Laying Out Operating Facilities

Purchasing, Inventory, and Quality Control

Basic Financial Planning

Budgeting and Controlling Operations and Taxes

Using Computer Technology in Small Businesses

Filters