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CAIB 1 PRACTICE QUESTIONS WITH CORRECT ANSWERS
Consideration is...
a. The law of insurance
b. A promise between parties
c. A contract's binding force
d. An exchange of something of value - CORRECT ANSWERd. An exchange of something of value
A stock company is...
a. A company that invests in other companies
b. A company owned by stockholders who provide the capital to
start and run the company
c. Is owned by customers of the company
d. A company that owns livestock - CORRECT ANSWER-b. A
company owned by stockholders who provide the capital to
start and run the company
The difference between pure and speculative risk is...
a. Speculative risk is insurable but pure risk is not
b. Speculative risk means that there is a chance to gain or lose
whereas one can only lose with pure risk
c. Speculative risk means that there is only the chance to lose
whereas pure risk means you have a chance to win too
d. Speculative risk is a term invented by marine insurance
companies in 1864 - CORRECT ANSWER-b. Speculative risk
means that there is a chance to gain or lose whereas one can
only lose with pure risk
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