Yes, the largest chord of a circle is its diameter.
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If you are given a chord length of a circle, unless you are given more information about the chord, you can not determine what the radius of the circle will be. This is because the chord length in a circle can vary from a length of (essentially) 0, up to a length of double the radius (the diameter). The best you can say about the radius if given the chord length, is that the length of the radius is at least as long has half half the chord length.
It is the diameter which is twice the radius giving a length of 8 cm
Take any circle and draw a straight line through it anywhere so that the line intersects the circle at two distinct points. The segment between the two points on the circle is the chord. A diameter, that is, a line segment through the center, could be a chord. But any shorter segment drawn through the circle and intersecting the circle at those two distinct points is a chord. It's just that simple. Need a link? You'll find one below.
The largest square that could fit in a circle of diameter 10 inches has dimensions 5sqrt(2) inches by 5sqrt(2) inches.