1In the context of the insurance industry, what is the primary role of a 'Smart Contract'?
A.To replace insurance agents with robots
B.To automatically execute policy terms, such as payouts, when pre-defined conditions are met
C.To store customer credit card details securely
D.To increase the premiums based on market volatility
Correct Answer: To automatically execute policy terms, such as payouts, when pre-defined conditions are met
Explanation:Smart contracts allow for the automation of claims processing. For example, if a flight is delayed by more than hours, the contract can automatically trigger a payout without manual intervention.
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2Which of the following is a major pain point in the traditional insurance sector that blockchain directly addresses?
A.Lack of internet connectivity
B.High frequency of customer phone calls
C.Fraudulent claims and lack of data transparency between parties
D.The inability to print paper policies
Correct Answer: Fraudulent claims and lack of data transparency between parties
Explanation:Blockchain provides an immutable ledger that prevents the double-submission of claims to multiple insurers and ensures that all parties view the same valid data, significantly reducing fraud.
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3In parametric insurance models (e.g., crop insurance based on weather), how does the blockchain receive external data like rainfall levels?
A.Through manual entry by the farmer
B.Using Oracles
C.Via Bitcoin mining
D.Through the consensus algorithm itself
Correct Answer: Using Oracles
Explanation:Blockchains cannot access external data natively. Oracles act as bridges that feed external data (like weather conditions) into the smart contract to trigger execution.
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4How does blockchain technology improve the reinsurance industry?
A.By eliminating the need for reinsurance entirely
B.By synchronizing data between primary insurers and reinsurers to reduce settlement times
C.By increasing the cost of premiums
D.By converting all policies into cryptocurrency
Correct Answer: By synchronizing data between primary insurers and reinsurers to reduce settlement times
Explanation:Blockchain allows primary insurers and reinsurers to share a single source of truth regarding risk and claims, streamlining the typically complex and slow reconciliation process.
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5In the context of life insurance claim processing involving death, what is the specific role of a 'Death Registry' oracle?
A.To predict when a policyholder will die
B.To verify the cause of death using AI
C.To cryptographically confirm the identity of the beneficiary
D.To automatically notify the smart contract of a death event to trigger claim processing
Correct Answer: To automatically notify the smart contract of a death event to trigger claim processing
Explanation:A Death Registry oracle monitors official government databases. When a death certificate is issued, the oracle pushes this state change to the blockchain, allowing the smart contract to process the claim immediately.
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6What is the primary benefit of using blockchain for 'Know Your Customer' (KYC) processes in financial institutions?
A.It allows customers to remain anonymous
B.It requires customers to submit documents to every bank individually
C.It enables a shared, secure ledger where KYC verification can be performed once and shared among institutions
D.It deletes customer data after 24 hours
Correct Answer: It enables a shared, secure ledger where KYC verification can be performed once and shared among institutions
Explanation:Blockchain allows for a 'KYC utility' model where a customer is verified once, and the proof of verification is stored on the ledger, reducing administrative duplication for other banks.
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7In healthcare blockchain solutions, what does 'Patient-Centric Data Management' imply?
A.Doctors own the data
B.Hospitals sell data to pharmaceutical companies
C.Patients own the private keys to their health records and grant permission for access
D.Data is stored publicly on Facebook
Correct Answer: Patients own the private keys to their health records and grant permission for access
Explanation:Blockchain empowers patients to control their Electronic Health Records (EHR) via private keys, granting temporary access to providers only when necessary.
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8Which problem regarding the pharmaceutical supply chain does blockchain primarily solve?
A.The high cost of R&D
B.Counterfeit drugs and lack of provenance
C.The time taken to manufacture pills
D.Marketing of new drugs
Correct Answer: Counterfeit drugs and lack of provenance
Explanation:By tracking the movement of drugs from the manufacturer to the pharmacy on an immutable ledger, blockchain ensures the provenance and authenticity of medicines, combating counterfeiting.
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9What is the concept of 'Tokenization' in Asset Management?
A.Replacing physical assets with slot machine tokens
B.Creating a digital representation of a physical asset (like real estate) on the blockchain
C.Using tokens to pay for arcade games
D.Encrypting data using a token ring topology
Correct Answer: Creating a digital representation of a physical asset (like real estate) on the blockchain
Explanation:Tokenization involves dividing the ownership of an asset into digital tokens, allowing for fractional ownership and increased liquidity of traditionally illiquid assets.
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10In traditional financial asset settlement, the standard time is often or . What does blockchain aim to achieve regarding this?
A.Increase it to
B.Maintain the status quo
C.Achieve near real-time () settlement
D.Make settlement random
Correct Answer: Achieve near real-time () settlement
Explanation:Blockchain enables atomic swaps and programmable money, allowing trade execution and settlement to happen almost simultaneously, reducing counterparty risk and capital requirements.
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11Which of the following creates a challenge for blockchain adoption in Healthcare regarding GDPR (General Data Protection Regulation)?
A.The Right to be Forgotten vs. Blockchain Immutability
B.The speed of transaction processing
C.The cost of data storage
D.The lack of encryption standards
Correct Answer: The Right to be Forgotten vs. Blockchain Immutability
Explanation:GDPR grants individuals the right to have their data erased. However, blockchain is designed to be immutable (permanent), creating a compliance conflict that often requires off-chain data storage architectures.
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12In the context of Electronic Currency, what is a CBDC?
A.Central Bitcoin Decentralized Coin
B.Central Bank Digital Currency
C.Crypto Based Dollar Currency
D.Computer Based Digital Code
Correct Answer: Central Bank Digital Currency
Explanation:CBDC stands for Central Bank Digital Currency, which is a digital form of a country's fiat currency issued and regulated by the nation's monetary authority.
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13How does blockchain assist in the 'Provenience of Luxury Assets' (e.g., diamonds, art)?
A.By physically marking the asset with a microchip only
B.By creating a digital passport that records the asset's history from origin to current owner
C.By lowering the price of the asset
D.By preventing the asset from being sold
Correct Answer: By creating a digital passport that records the asset's history from origin to current owner
Explanation:Blockchain creates an unalterable history (provenance) of an asset. For diamonds (e.g., Everledger), this tracks the stone from the mine to the consumer to ensure it is ethical and authentic.
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14What is a 'Stablecoin'?
A.A cryptocurrency with a highly volatile price
B.A cryptocurrency pegged to a stable asset like the US Dollar or Gold
C.A coin that cannot be moved from a wallet
D.A physical coin made of stable metal
Correct Answer: A cryptocurrency pegged to a stable asset like the US Dollar or Gold
Explanation:Stablecoins are designed to minimize volatility by pegging their value to a stable external asset, making them more suitable for transactions and storing value compared to volatile cryptos like Bitcoin.
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15In a blockchain-based Life Insurance system, what happens to the 'Unclaimed Benefits' problem?
A.It increases because keys are lost
B.It is mitigated because smart contracts can automatically route funds to beneficiaries upon death verification
C.The funds are donated to charity automatically
D.The insurance company keeps 100% of the funds
Correct Answer: It is mitigated because smart contracts can automatically route funds to beneficiaries upon death verification
Explanation:Currently, billions involve unclaimed insurance benefits because beneficiaries are unaware of policies. Automation via blockchain ensures beneficiaries are paid immediately upon the automated verification of the policyholder's death.
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16Which consensus mechanism is most criticized for its high energy consumption in the context of early Electronic Currencies like Bitcoin?
A.Proof of Stake (PoS)
B.Proof of Work (PoW)
C.Proof of Authority (PoA)
D.Delegated Proof of Stake (DPoS)
Correct Answer: Proof of Work (PoW)
Explanation:Proof of Work requires solving complex mathematical puzzles (), which consumes vast amounts of computational power and electricity.
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17How does blockchain facilitate 'Fractional Ownership' in real estate asset management?
A.By physically dividing the building into smaller rooms
B.By issuing digital tokens representing a percentage share of the property
C.By allowing multiple people to live in one house
D.By reducing the property taxes
Correct Answer: By issuing digital tokens representing a percentage share of the property
Explanation:Tokenization allows a high-value asset to be split into millions of tokens. An investor can buy $100 worth of a building rather than needing millions to buy the whole property.
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18What is the 'Double Spending' problem in electronic currency that blockchain solves?
A.Spending more money than you earn
B.Successfully spending the same digital token more than once
C.Buying two items for the price of one
D.Paying double the tax on a transaction
Correct Answer: Successfully spending the same digital token more than once
Explanation:In digital systems, files can be copied. Double spending occurs if a user sends the same unit of currency to two different recipients. Blockchain prevents this via consensus and a timestamped ledger.
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19In the context of financial institutions, what is 'Trade Finance' and how does blockchain help?
A.Trading stocks; blockchain makes it slower
B.Complex processes involving letters of credit for international trade; blockchain digitizes and speeds up document flow
C.Financing for local tradesmen; blockchain offers loans
D.Exchange of physical cash; blockchain prints money
Correct Answer: Complex processes involving letters of credit for international trade; blockchain digitizes and speeds up document flow
Explanation:Trade finance relies on paper-heavy processes (Bills of Lading, Letters of Credit). Blockchain digitizes these documents, allowing all parties (importer, exporter, banks, shippers) to view real-time status, reducing time from weeks to hours.
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20Which of the following is a key advantage of blockchain in Clinical Trials?
A.It allows researchers to modify data to get better results
B.It ensures the immutability and timestamping of trial results, preventing data tampering
C.It removes the need for human patients
D.It automatically approves the drug for sale
Correct Answer: It ensures the immutability and timestamping of trial results, preventing data tampering
Explanation:Blockchain prevents 'selective reporting' or data manipulation in clinical trials by recording data points permanently as they are generated.
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21What acts as the 'Trigger' in a smart contract for flight delay insurance?
A.The passenger filing a complaint
B.The airline issuing an apology
C.Flight status data provided by a trusted Oracle
D.The blockchain mining difficulty
Correct Answer: Flight status data provided by a trusted Oracle
Explanation:The smart contract code monitors data from a flight database (Oracle). If the status changes to 'Delayed > 2 hours', the trigger executes the payout function.
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22In asset management, what is a 'Liquidity Premium' and how does blockchain affect it?
A.The cost of water; blockchain increases it
B.The discount applied to assets that are hard to sell; blockchain reduces this by increasing liquidity via tokenization
C.The extra money paid for liquid assets; blockchain increases it
D.A tax on liquid assets
Correct Answer: The discount applied to assets that are hard to sell; blockchain reduces this by increasing liquidity via tokenization
Explanation:Illiquid assets (like buildings) usually trade at a discount because they are hard to sell. Tokenization makes them easier to trade (higher liquidity), thereby reducing the illiquidity discount (or premium).
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23Which cryptographic feature ensures the privacy of patient identities on a healthcare blockchain?
A.Proof of Work
B.Hashing and Public/Private Key Cryptography
C.Distributed Ledger
D.Smart Contracts
Correct Answer: Hashing and Public/Private Key Cryptography
Explanation:Patient identities are pseudonymized using public keys (addresses), and access is controlled via private keys. Often, only a hash of the record is on-chain, while the data remains off-chain.
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24For a Life Insurance blockchain solution, why is 'immutability' crucial?
A.To allow the insurer to change the policy later
B.To ensure that the policy terms cannot be altered after the agreement is signed
C.To prevent the user from paying premiums
D.To allow the government to tax the policy
Correct Answer: To ensure that the policy terms cannot be altered after the agreement is signed
Explanation:Immutability ensures trust. Once a policy is written to the blockchain, the insurer cannot arbitrarily change the payout amount or conditions, protecting the policyholder.
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25How can blockchain reduce the 'protection gap' in insurance?
A.By making insurance more expensive
B.By using automated micro-insurance processing to serve low-income populations efficiently
C.By closing down insurance companies
D.By only insuring the wealthy
Correct Answer: By using automated micro-insurance processing to serve low-income populations efficiently
Explanation:Traditional insurance has high administrative costs, making small policies (micro-insurance) unviable. Blockchain automation reduces these costs, allowing insurers to offer affordable protection to developing markets.
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26What is the risk of '51% Attack' in the context of Electronic Currency?
A.If an entity owns 51% of the currency, they dictate the price
B.If an entity controls more than 50% of the network's computing power, they can reverse transactions
C.The currency loses 51% of its value
D.51% of the users leave the network
Correct Answer: If an entity controls more than 50% of the network's computing power, they can reverse transactions
Explanation:In PoW blockchains, if an attacker controls the majority of the hashrate, they can reorganize the chain and potentially double-spend coins.
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27In financial institutional assets, what is 'Reconciliation'?
A.Making friends with competitors
B.The process of comparing two sets of records to ensure they match; blockchain eliminates the need for this by providing a single shared ledger
C.The process of mining new coins
D.Calculating the interest rate
Correct Answer: The process of comparing two sets of records to ensure they match; blockchain eliminates the need for this by providing a single shared ledger
Explanation:Currently, banks maintain their own ledgers and must constantly reconcile them. A shared blockchain ledger serves as a 'Single Source of Truth,' eliminating the need for costly reconciliation.
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28What is ' interoperability' in the context of Healthcare Blockchain?
A.The ability of different blockchain systems and legacy hospital systems to exchange and make use of information
B.The ability to operate on a patient
C.The speed of the network
D.The cost of the software
Correct Answer: The ability of different blockchain systems and legacy hospital systems to exchange and make use of information
Explanation:Healthcare data is siloed (fragmented). Interoperability refers to the challenge and goal of enabling different systems to communicate data seamlessly via blockchain standards.
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29Which type of blockchain is most likely to be used by a consortium of banks for inter-bank settlements?
A.Public Permissionless (like Bitcoin)
B.Private Permissioned (Consortium)
C.Hybrid Proof of Stake
D.Single Node Ledger
Correct Answer: Private Permissioned (Consortium)
Explanation:Banks require privacy, high throughput, and known validators (KYC). A permissioned consortium blockchain (like R3 Corda or Hyperledger Fabric) is suited for this, rather than a public anonymous chain.
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30How does 'Programmable Money' differ from traditional electronic transfers?
A.It doesn't; they are the same
B.Programmable money includes code (smart contracts) that defines rules for how and when the money can be spent
C.Programmable money is always printed on paper
D.Traditional transfers are faster
Correct Answer: Programmable money includes code (smart contracts) that defines rules for how and when the money can be spent
Explanation:Programmable money (like tokens on Ethereum) can have built-in logic. For example, a payment that is only released if three distinct people sign the transaction (Multi-sig).
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31In the context of Claims Processing, what is the advantage of a transparent ledger?
A.It allows hackers to steal money
B.It allows the auditor to trace the entire lifecycle of a claim to detect anomalies
C.It makes the process slower
D.It hides the data from the customer
Correct Answer: It allows the auditor to trace the entire lifecycle of a claim to detect anomalies
Explanation:Transparency creates an audit trail. Every step of the claim—from submission to approval/denial—is recorded, making it easier to spot suspicious patterns or internal fraud.
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32Which of the following best describes 'Credentialing' in Healthcare via blockchain?
A.Verifying a patient's insurance
B.A decentralized ledger where a doctor's qualifications are verified once and trusted by all hospitals
C.Creating a login password for the hospital Wi-Fi
D.Assigning a credit score to patients
Correct Answer: A decentralized ledger where a doctor's qualifications are verified once and trusted by all hospitals
Explanation:Currently, doctors must prove their credentials to every hospital they work at. Blockchain allows a verification agency to attest to the credentials once on-chain, which hospitals can then query instantly.
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33In Asset Management, what role does a 'Custodian' play in a blockchain environment?
A.They clean the server rooms
B.They securely hold the private keys that control the digital assets on behalf of institutional investors
C.They mine the blocks
D.They write the smart contracts
Correct Answer: They securely hold the private keys that control the digital assets on behalf of institutional investors
Explanation:Institutional investors are required by law to have qualified custodians. In crypto/blockchain, this means securely managing the private keys to prevent theft.
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34What is the mathematical function primarily used to link blocks in a blockchain, ensuring data integrity?
A.Sine Wave
B.Cryptographic Hash Function (e.g., SHA-256)
C.Differential Calculus
D.Linear Regression
Correct Answer: Cryptographic Hash Function (e.g., SHA-256)
Explanation:Each block contains the hash of the previous block (). If data in a previous block changes, its hash changes, breaking the chain. This ensures integrity.
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35Regarding Life Insurance, how does blockchain assist in 'Underwriting'?
A.It writes the policy on paper
B.It aggregates verifiably accurate data (medical history, lifestyle) from various sources to better assess risk
C.It automatically rejects all applicants
D.It removes the need for premiums
Correct Answer: It aggregates verifiably accurate data (medical history, lifestyle) from various sources to better assess risk
Explanation:Blockchain allows for the secure sharing of historical data. With better data quality (provenance), underwriters can assess risk more accurately, potentially offering personalized premiums.
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36What is 'Cross-Border Payment' friction, and how does blockchain reduce it?
A.The physical friction of cash; blockchain uses oil
B.The delays and fees caused by multiple intermediary banks; blockchain allows peer-to-peer transfer without intermediaries
C.The border control police; blockchain bypasses customs
D.The exchange rate; blockchain fixes all rates to 1:1
Correct Answer: The delays and fees caused by multiple intermediary banks; blockchain allows peer-to-peer transfer without intermediaries
Explanation:Traditional SWIFT transfers go through correspondent banks, taking days and incurring fees. Blockchain (e.g., Ripple, Stellar) enables direct value transfer globally in seconds.
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37In a blockchain supply chain for medical devices, what is 'Track and Trace'?
A.Following the doctor around the hospital
B.Monitoring the real-time location and status of a device from manufacture to implantation
C.Tracing the outline of the device on paper
D.Tracking the payment of the device
Correct Answer: Monitoring the real-time location and status of a device from manufacture to implantation
Explanation:This ensures that medical devices (like pacemakers) are not recalled, expired, or counterfeit before they reach the patient.
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38What is a 'DAO' in the context of financial assets?
Explanation:A DAO is an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government.
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39Why is 'Data Siloing' a problem in the insurance industry that blockchain addresses?
A.Data is stored in grain silos
B.It prevents data from being backed up
C.Different departments or companies hold fragmented data, preventing a holistic view of the customer/risk
D.It makes data too accessible to the public
Correct Answer: Different departments or companies hold fragmented data, preventing a holistic view of the customer/risk
Explanation:Silos lead to inefficiencies and errors. A distributed ledger breaks down silos by providing a shared infrastructure for data access (with permission).
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40In Electronic Currency, what is the role of a 'Wallet'?
A.To store the actual coin files
B.To store public and private keys and interact with the blockchain
C.To keep physical receipts
D.To mine new coins
Correct Answer: To store public and private keys and interact with the blockchain
Explanation:Wallets do not store the currency (which lives on the ledger). They store the keys required to sign transactions and manage addresses.
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41How does blockchain improve 'Subrogation' in insurance?
A.It prevents insurance companies from recovering money
B.It automates the recovery of funds from at-fault parties through transparent, shared data on liability
C.It increases legal fees
D.It allows drivers to drive without insurance
Correct Answer: It automates the recovery of funds from at-fault parties through transparent, shared data on liability
Explanation:Subrogation (recovering costs from the at-fault party's insurer) is currently manual and litigious. A shared ledger can automate liability determination and payment settlement.
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42Which standard is often associated with tokens on the Ethereum blockchain for Asset Management?
A.ISO 9001
B.ERC-20 and ERC-721
C.HTTP/2
D.TCP/IP
Correct Answer: ERC-20 and ERC-721
Explanation:ERC-20 is the standard for fungible tokens (like currency), and ERC-721 is the standard for non-fungible tokens (NFTs/unique assets), both crucial for asset management.
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43In the context of life insurance, how does blockchain help with 'Fraud Detection' regarding the beneficiary?
A.By checking their social media
B.By using digital identity (DID) verification to ensure the claimant is the legitimate beneficiary
C.By asking for a handwritten letter
D.It cannot help with beneficiary fraud
Correct Answer: By using digital identity (DID) verification to ensure the claimant is the legitimate beneficiary
Explanation:Blockchain-based Digital Identities allow for cryptographically secure verification of who is making the claim, reducing identity theft fraud.
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44What is the primary barrier to the widespread adoption of blockchain in Global Healthcare?
A.The technology does not work
B.Regulatory compliance (HIPAA/GDPR) and lack of standardization
C.Doctors refuse to use computers
D.Patients prefer paper records
Correct Answer: Regulatory compliance (HIPAA/GDPR) and lack of standardization
Explanation:While technically feasible, complying with strict privacy laws and getting all global healthcare providers to agree on a data standard is a massive hurdle.
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45In financial asset management, what does 'Atomic Swap' allow?
A.Swapping atoms in a physics lab
B.The exchange of one cryptocurrency for another without a centralized intermediary
C.Buying stocks with cash
D.A loan that explodes if not paid
Correct Answer: The exchange of one cryptocurrency for another without a centralized intermediary
Explanation:Atomic swaps use smart contracts (Hashed Timelock Contracts) to ensure that either the swap happens completely (both parties get their funds) or not at all, removing counterparty risk.
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46What is the specific advantage of using a 'Private Blockchain' for Hospital Management Systems?
A.Anyone in the world can view patient records
B.It is completely anonymous
C.Access controls are restricted to authorized medical personnel only, ensuring privacy
D.It requires mining by patients
Correct Answer: Access controls are restricted to authorized medical personnel only, ensuring privacy
Explanation:Public blockchains are too transparent for medical records. Private/Permissioned chains allow hospitals to define exactly who (doctors, nurses) has read/write access.
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47How does 'Parametric Life Insurance' differ from traditional life insurance?
A.It pays out based on the severity of grief
B.It pays out a fixed amount upon the occurrence of a specific event (trigger) rather than assessing the magnitude of loss
C.It never pays out
D.It is only for animals
Correct Answer: It pays out a fixed amount upon the occurrence of a specific event (trigger) rather than assessing the magnitude of loss
Explanation:Parametric insurance relies on hard data triggers. While common in weather insurance, in life insurance, it could trigger a specific payout immediately upon a confirmed death registry update, bypassing complex claim adjustments.
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48What is the 'Genesis Block'?
A.The last block in a chain
B.The first block of a blockchain
C.A block that was rejected
D.A block containing smart contracts only
Correct Answer: The first block of a blockchain
Explanation:The Genesis Block is block 0 (or 1), the first block upon which the entire blockchain is built. It is usually hardcoded into the software.
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49In the context of Asset Management, what does 'Immutable History' prevent?
A.Selling the asset
B.Title fraud and retroactive alteration of ownership records
C.Price appreciation
D.Taxation
Correct Answer: Title fraud and retroactive alteration of ownership records
Explanation:In real estate and high-value assets, bad actors sometimes try to forge deeds or alter past records. Blockchain's immutability makes changing past ownership records mathematically impossible.
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50What is the definition of 'Fiat Currency' compared to Cryptocurrency?
A.Currency backed by gold
B.Currency that has no intrinsic value and is established as money by government regulation
C.Currency mined by computers
D.Currency used only in Italy
Correct Answer: Currency that has no intrinsic value and is established as money by government regulation
Explanation:Fiat (e.g., USD, EUR) derives value from government decree and trust in the economy, whereas most cryptocurrencies derive value from supply/demand and network utility.
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