CPCU 530 PRACTICE EXAM | UPDATED QUESTIONS AND ALL VERIFIED ANSWERS, Exams of Credit and Risk Management

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CPCU 530 PRACTICE EXAM | UPDATED QUESTIONS AND ALL VERIFIED ANSWERS Which one of the following correctly describes a bailee’s right to limit liability for the bailed goods in the bailment contract? - Correct Answer A bailee has a right to limit liability only for ordinary negligence, not for willful or wanton misconduct. Miguel seeks to insure his personal auto to comply with state regulations. He contacts an insurance agent who provides Miguel with a personal auto policy with Atlas Motorist Insurance Company ("Atlas"). Which one of the following best describes the contractual relationship between Miguel and Atlas? - Correct Answer An express contract Maria owns a commercial building and places insurance with Bastion Insurance. Because the annual premium is high, and cash is tight, Maria decides to enter into a premium finance agreement with Finance Co. ("Finance"). Under the premium finance agreement, Finance pays Bastion the full annual premium and Maria pays Finance a monthly amount for the premium, a fee and interest. At the midpoint of the policy year, which one of the following best describes Maria's premium finance agreement with Finance? - Correct Answer A bilateral contract Daniel offers a ride to Lily, a ten-year-old, and takes her to his house where he locks her in his cellar and demands money from Lily's parents to secure her return. The parents agree to pay and Lily is returned, but Daniel never receives the money. He sues Lily's parents for breach of contract. Which one of the following explains why Daniel's contract with Lily's parents is not legally binding? - Correct Answer It lacks a legal purpose.