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101. Nancy owns a high-fashion boutique and one source of competitive advantage in the past
has been her ability to spot the latest trends, stock the store with those items, and sell out before
the next new trend becomes popular. Unfortunately, this year Nancy missed on what would be
"hot" and is now stuck with mountains of clothing and accessories that did not sell. All of her
cash is invested in this clothing and at the moment she is unable to restock the store with the
next season's clothes. Nancy is likely not worried because:
102. Demetrius was turned down when he attempted to buy a life insurance policy on his
former Introduction to Business instructor. The most likely reason the insurance company turned
down his attempt to insure the life of his former instructor was that:
103. The National Highway Traffic Safety Administration (NHTSA) provides consumers with
recall notices for all makes and models of cars, trucks, motorcycles, and even school buses. In
terms of risk management, the purpose of the NHTSA service is:
104. The Best West Soccer Athletic Association was formed to administer youth soccer
leagues and tournaments in a popular urban area. All board members recently resigned stating
that they could no longer assume the risk of participating on a board that did not insure its
volunteer members against serious player injuries and other unanticipated problems. Collectively,
these members are:
105. Green Gardens Sprinkler Systems Company experienced increasing sales for several
years. The firm expanded its product offerings, and now serves both commercial and residential
customers. Which of the following situations would be considered an uninsurable risk for Green
Gardens?
106. Risky Business Insurance Company insures business clients against unexpected
disasters such as tornadoes and floods. The company operates in several regions in the U.S., and
negotiates contracts following standard insurance industry guidelines. A strategic business
guideline that the company would follow is:
107. The ________ says that an insured person cannot collect more than the actual loss from
an insurable risk.
108. A ________ insurance company is owned by stockholders, just like any other investor-
owned company. A ________ insurance company is owned by its policyholders.
109. There have been a series of large judgments in product liability cases against companies
producing hairdryers. If this trend continues, insurance companies will respond by ________ the
premiums charged for liability insurance for hairdryer manufacturers.
110. Which of the following statements best reflects the concept behind the rule of
indemnity?
111. Rebecca received a letter in the mail from her employer's insurance company inquiring if
her children had health insurance coverage from another provider. According to the
_____________ the insurance provider has the right to this information.
112. Home-based business owners add a ________ to their homeowner's insurance policy to
ensure that they have adequate coverage.
113. ________ insurance replaces part of your income if you become unable to work for an
extended period of time.
114. ________ insurance guarantees payment of wages, medical care, and rehabilitation
services for employees who are injured on the job.
