1. Risk Management. What is risk? What is risk management? How does insurance fit into risk management?
Risk is:
A. the acceptance of a financial loss.
B. exposure to events that can cause a financial loss.
C. the avoidance of a financial loss.
D. the value of a financial loss.
2. The first step in risk management is to decide: (Select the best answer below.)
A. if the risk is real.
B. whether to protect against risk.
C. who to buy insurance from.
D. the type of insurance you need.
3. You should consider insurance if: (Select the best answer below.)
A. you do not wish to be exposed to a financial loss as a result of the risk.
B. you cannot avoid the risk.
C. you cannot reduce the risk.
D. All of the above.