Which type of risk is most likely to be insurable?

Question

A.
Pure risk
B.
Speculative risk
C.
Equity risk
D.
Investment risk

Answer 1

A. Pure risk

Pure risk refers to situations that involve only the possibility of loss or no loss, with no chance for profit. This type of risk is more likely to be insurable because insurers can predict and manage potential losses based on statistical data. Speculative risks, on the other hand, involve the possibility of loss or gain, making them more challenging for insurers to cover.

Answer 2

If you co-sign for a friend's credit card, what is the danger to you if your friend fails to pay?
A.
You might get secured credit.
B.
You might have to pay extra money in taxes.
C.
Your credit score might go down.
D.
Your credit score might go up.

Answer 3

C. Your credit score might go down.

If you co-sign for a friend's credit card and your friend fails to make the payments, you become responsible for that debt. If the payments are missed or late, it can negatively impact your credit score, leading to a decline in your creditworthiness.

Answer 4

Which of the following sections of a business plan comes first but should be written last?
A.
Goals and Strategy
B.
Executive Summary
C.
Products and Services
D.
Funding Request

Answer 5

B. Executive Summary

The Executive Summary is typically the first section of a business plan, but it should be written last. This is because the Executive Summary summarizes key points of the entire plan, so it is most effective when the author has a complete understanding of all sections of the plan and can concisely capture its essence.

Answer 6

A company is usually unable to take advantage of economies of scale during the __________ stage of the product life cycle.
A.
Saturation
B.
Introduction
C.
Growth
D.
Maturity

Answer 7

B. Introduction

During the introduction stage of the product life cycle, a company typically experiences low sales volume and high costs associated with launching the product. As a result, it is usually unable to take advantage of economies of scale, which occur when production increases and unit costs decrease. Economies of scale typically become more attainable during the growth and maturity stages when sales increase and production can be scaled up.

Answer 8

In the accounting equation, assets are equal to which two things?
A.
Debits + equity
B.
Debits + accounts
C.
Liabilities + equity
D.
Liabilities + accounts

Answer 9

C. Liabilities + equity

In the accounting equation, the relationship is expressed as:

Assets = Liabilities + Equity

This fundamental equation illustrates that a company's assets are funded by borrowing (liabilities) and by the owners' contributions (equity).

Answer 10

If your company increases its market penetration, what is happening?
A.
The target market is growing.
B.
More people in the target market are buying the company's product.
C.
The market saturation of the target market has decreased.
D.
Competitors who offer similar products are entering the market.

Answer 11

B. More people in the target market are buying the company's product.

Increasing market penetration means that a company is successfully increasing its share of sales within its existing market, which typically indicates that more consumers in that target market are buying the company's product. This can also imply that the company is gaining a competitive advantage or effectively overcoming barriers to purchase in that market.