Exam (elaborations)
CPCU 500 Exam Study Guide/357 Questions and Answers/100% Correct!!
- Course
- Institution
CPCU 500 Exam Study Guide/357 Questions and Answers/100% Correct!!
[Show more]
Seller
Follow
Victorious23
Reviews received
Content preview
CPCU 500 Exam Study Guide/357Questions and Answers/100% Correct!!
In the context of risk, the chance of being injured while driving to and from
work, loading a truck at work, moving furniture at home, or falling in an icy
parking lot at the mall are all examples of
A. Possibilities.
B. Uncertainties.
C. Probabilities.
D. Losses. - -A. Possibilities.
-The statement, "There is a five percent chance that John will be injured in
an automobile accident while driving to work tomorrow," is an example of
A. Quantifying risk.
B. Verifying risk.
C. Quantifying loss exposures.
D. Identifying hazards. - -A. Quantifying risk.
-Which one of the following is measurable and quantifies risk?
A. Probability
B. Possibility
C. Uncertainty
D. Feasibility - -A. Probability
-One of the elements of risk is uncertainty. Which one of the following best
describes the uncertainty that risk involves?
A. Uncertainty as to how to manage potential losses
B. Uncertainty as to whether a negative outcome is possible
C. Uncertainty as to the type and timing of an outcome
,D. Uncertainty as to whether insurance is available - -C. Uncertainty as to
the type and timing of an outcome
-Hardware Store has been able to control its prices and inventory since it
has no competitors. A new highway currently being constructed is going to
allow increased competition for Hardware Store. According to the quadrants
of risk, this risk of increased competition falls into the category of
A. Strategic risk.
B. Hazard risk.
C. Operational risk.
D. Financial risk. - -A. Strategic risk.
-Company G is a manufacturer of high profile golf equipment. The risk
management professional for Company G is concerned about loss of
business related to product design. Failing to respond to changing customer
demand and preferences in the design of golf clubs could cost Company G
significant market share. Categorized according to the quadrants of risk, this
exposure to loss would be classified as a(n)
A. Strategic risk.
B. Financial risk.
C. Operational risk.
D. Hazard risk. - -A. Strategic risk.
-George has received an inheritance and is deciding what to do with the
money. He has limited his options to four choices: donate all the money to
his favorite charity, use the entire inheritance to buy a yacht, invest the
inheritance in a small rental property, or use the entire amount to purchase
T-bills. Which one of the following statements is true regarding the risk
involved in George's options?
A. Donating his inheritance to charity is a pure risk; there is no uncertainty
that the money will be gone and George will have no chance of profit.
B. Buying a boat is a nondiversifiable risk because George can only afford to
purchase a single yacht.
,C. The rental property presents both pure and speculative risk; property
values may increase, and the building could burn down.
D. Purchasing T-bills is a pure risk because the interest rate payable is
known, and the chance of loss is minimal. - -C. The rental property presents
both pure and speculative risk; property values may increase, and the
building could burn down.
-Risk can be classified as pure or speculative. Which one of the following is
the best example of a speculative risk?
A. Acquiring a new television
B. Investing in shares of stock
C. Buying a new personal vehicle
D. Purchasing an insurance policy - -B. Investing in shares of stock
-Which one of the following statements is true regarding enterprise risk
management (ERM)?
A. ERM is concerned with an organization's pure risk, primarily hazard risk.
B. The ERM framework encompasses all stakeholders in the organization.
C. In ERM, the risk management function is the responsibility of the safety
manager.
D. ERM requires less communication than traditional risk management. - -B.
The ERM framework encompasses all stakeholders in the organization.
-A risk management plan that considers all of the risks that an organization
faces, including operational, financial, and strategic risks, is called
A. An enterprise risk management plan.
B. An open-perils risk management plan.
C. A protected cell risk management plan.
D. A hazard risk management plan. - -A. An enterprise risk management
plan.
-The single largest impediment to successful implementation of an
enterprise risk management (ERM) program is
, Select one:
A. Traditional organizational culture with entrenched risk silos.
B. Lack of required skills to effectively implement an ERM program.
C. Lack of vision by the management team that leads to under-performance
of the ERM plan and early termination.
D. Opposition from stakeholders—employees, stockholders, customers, and
suppliers. - -A. Traditional organizational culture with entrenched risk silos.
-The consensus process by which the veracity of data is confirmed and
verified is known as
Select one:
A. Telematics.
B. Machine learning.
C. The Internet of Things.
D. Mining. - -D. Mining.
-Which one of the following is a virtual ledger of data that has been verified,
timestamped, encrypted, and protected against tampering?
Select one:
A. Artificial intelligence
B. The Internet of Things
C. Closed-loop system
D. Blockchain - -D. Blockchain
-Which one of the following is the network through which sensors and other
smart products capture and transmit data?
Select one:
A. Blockchain
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Victorious23. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $20.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
81989 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now