1. A moral hazard is best described as:

A dishonest tendency, such as a willingness to lie or commit fraud, that increases the chance of loss

A moral hazard is a character flaw, such as dishonesty or a willingness to commit fraud, that increases the likelihood of loss.

2. A morale hazard refers to:

An attitude of carelessness or indifference that increases the chance of loss

A morale hazard is an indifferent or careless attitude, often arising because insurance exists, that raises the chance of loss.

3. Which of the following is a characteristic of an ideally insurable risk?

The loss must be definite, measurable, and due to chance

An ideally insurable risk involves losses that are definite, measurable, and due to chance, among other characteristics.

4. An insurance policy is a conditional contract because:

Both parties must meet certain conditions before benefits are payable

A policy is conditional because the insurer pays only if conditions, such as paying premiums and filing proof of loss, are met.