BML 11-3 Question Preview (ID: 8497)

Business Management And Law, Chapter 11, Set 3.[print questions]

To manage uninsurable risks, a business should do all of the following EXCEPT
a) study all of the risk areas
b) calm employees by telling them that these are not the risks they are looking for
c) practice careful hiring policies
d) be active in the local community

Piracy is
a) a major problem with shipping companies.
b) only applicable to domestic markets.
c) strongly discouraged by every country's government.
d) the illegal copying of software packages or information.

A company can reduce international business risk by
a) offering a wide range of products.
b) doing business in many different countries.
c) working closely with locals.
d) all of these

a) never pays for anything.
b) exchanges the uncertainty of a possible large financial loss for a certain smaller payment.
c) is always a wise purchase.
d) is financially feasible for almost every conceivable type of risk.

Insurance companies also
a) launder money.
b) steal orphans in the middle of the night.
c) make unicorns out of common ponies.
d) function as investment companies.

Workers' compensation is a type of
a) life insurance.
b) disability insurance.
c) business interruption insurance.
d) liability insurance.

Commercial property insurance provides compensation for
a) injuries to employees or customers that might occur on commercial property.
b) ongoing business expenses that occur if a business has a temporary shutdown due to a fire, flood or other major problem.
c) property losses resulting from fire, storms, accidents, theft, and vandalism.
d) property losses resulting from interruptions in television programs for advertising purposes.

After a property is rebuilt using funds from FEMA's flood insurance program,
a) that property's insurance premiums increase to represent the heightened flood risk.
b) the property owner is required to take steps to protect the property from future floods.
c) future claims are limited since the property owner is on notice that his property is at risk for flooding.
d) none of these - the property owner is guaranteed to continue to receive subsidized flood insurance.

Independent insurance agents
a) can charge policyholders whatever they want for premiums.
b) work for a large insurance company and sell only policies written by that company.
c) usually sell many kinds of policies from a number of different companies.
d) work only for businesses, not individuals, and therefore have special expertise in business-related insurance needs.

When an organization broadens its product line, business risks are
a) reduced because lower-than-expected sales of one item will not result in a complete failure for the company.
b) increased because production expenses will rise.
c) eliminated altogether once the business becomes
d) not affected because each new set of products brings a new set of risks.

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