Arkansas Insurance Adjuster Practice Exam

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Prepare for the Arkansas Insurance Adjuster Exam with flashcards and multiple choice questions, each offering hints and explanations. Equip yourself for your test confidently!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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By installing an alarm system and smoke detectors in her storage building, what risk management strategy is Amy practicing?

Risk avoidance
Risk transference
Risk reduction
Risk retention

The correct answer is: Risk reduction

Amy is practicing risk reduction by installing an alarm system and smoke detectors in her storage building. This involves taking action to minimize the likelihood and impact of potential risks. Options A and B, risk avoidance and risk transference respectively, involve avoiding or shifting the risks altogether, rather than actively lowering the risk level. Option D, risk retention, involves accepting the risk and handling any potential consequences on one's own. Therefore, option C is the most appropriate risk management strategy for Amy in this situation.