1. Which of the following is mentioned in your textbook as a responsibility of every member in a small group?
develop hidden agendas
reach solutions swiftly
call for a vote on major decisions
all of the above
none of the above
2. According to a recent survey, which of the following is the most important in shaping a hiring decision?
grade-point average
extra curricular activities
ability to communicate effectively
work experience
3. “What personal qualities do you have that you think would be helpful in working with the teams within our organization?”
lawful
unlawful
1. An individual’s demand for insurance depends on all of the following except:
a. Premium loading
b. Risk aversion
c. Persons income and wealth
d. Nature of the losses
2. An analyst knows for certain that Skipper Inc. will last for two years and will have the following cash flows.
Year 1 Year 2
Revenue 100 100
Costs 80 80
Net cash flow 20 20
Calculate the stock price of Skipper Inc if the opportunity cost of capital is 8%
3. Insurance can impact cash flows in all the following ways except
a. Reduce expected tax payments
b. Reduce costs of claims
c. Reduce the cost of loss control
d. Reduce the cost administrative staff
1. Risk retention is optimal when:
a. High severity, low frequency
b. Low severity, high frequency
c. Low severity, low frequency
d. High severity, high frequency
2. Present value analysis can be useful in deciding how much money to spend on loss control. If net present value is positive, expenditures are justified
a. True
b. False
3. Purchasing Power Parity theory is that exchange rates adjust to the purchasing power of each currency tends to be the same.
a. True
b. False
1. All of the following are defined as the nature of insurance except:
a. Pooling
b. Principal of indemnity
c. Insurable interest
d. Lack of consideration
2. All of these are requirements of the insurance contract except:
a. The insurance company must be licensed in the state
b. Agreement must be for legal purposes
c. Parties must have legal capacity to contract
d. There must be a valid offer and acceptance.
3. The following risks are thought to have the most impact on the financial viability of a company or project except:
a. Construction delay
b. Interest rates
c. Insurance
d. Corporate bond
1. A derivative is a contract between two or more parties, and the value of the contract is based on underlying assets. In addition, the value of the contract can fluctuate depending on the type of security. Common types of underlying assets typically include stocks, bonds, commodities, currencies, interest rates, and market indexes
a. True
b. False
2. Purchasing Power Parity theory is that exchange rates adjust to the purchasing power of each currency tends to be the same.
a. True
b. False
a. Pooling
b. Principal of indemnity
c. Insurable interest
d. Lack of consideration
3. All of the following are defined as the nature of insurance except:
