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Section 1.4 Quiz

1
Section 1.4 Review

Pure risk involves the possibility of loss only, whereas speculative risk involves the possibility of loss and gain.

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2

The systematic selection of loss exposures is prohibited due to the rules of adverse selection.

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3

A bodily disease of endangerment, such as cancer, presents a hazard. An unhealthy habit, such as smoking, presents a hazard. A mental trait, such as road rage, presents a hazard.


Word bank: moral, morale, physical

A bodily disease of endangerment, such as cancer, presents a physical hazard. An unhealthy habit, such as smoking, presents a moral hazard. A mental trait, such as road rage, presents a morale hazard.

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4

Risk ___________ occurs when an individual eludes risk entirely.

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5

Risk _____________ is when the chances of loss are lessened.

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6

Risk _____________ occurs when an individual takes precautions for protection by allowing another party to maintain a portion of the risk.

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7

Risk _______________ occurs when an individual shifts the responsibility of covering the risk to another.

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