CPCU 500 - Simulated Exam Questions and Answers 100% Verified

CPCU 500 - Simulated Exam Questions and Answers 100% Verified InterMountain Railroad carries logs, lumber, plywood, and other forest products in a six-state region in the Western part of the United States. InterMountain self-insures its derailment cargo losses. The risk manager at InterMountain ran a regression using ton-miles (one ton of cargo carried one mile) as the independent variable and dollar losses as the dependent variable. The independent variable is in units per 10,000 and the dependent variable is per 1,000. The resulting regression equation is: y = 2.65 x + (−13.8) Next year, InterMountain estimates that it will record 5,000,000 ton-miles of shipments. Given a building materials shortage, projected for next year, the cargo will be more valuable, so a 12% increase in value factor should be applied to the dollar loss estimate. Based on this information, what are InterMountain's final expected derailment cargo losses for next year, rounded to the nearest $10? Selec - answer$1,468,540 y-intercept = −13.8; slope = 2.65; y = (2.65 × 500) + (−13.8) = 1,311.2; 1,311.2 X 1.12 = 1,468.54; 1,468.54 X 1,000 = 1,468,540. InterMountain's final expected derailment cargo losses for next year are $1,468,540. Quade Enterprises has been targeted by animal rights groups due to its use of animals in product testing. One night, bricks are thrown through the front windows of Quade's corporate headquarters. This act is an example of Select one: A. Extortion. B. Political terrorism. C. Vandalism D. Breaking and entering. - answerVandalism Samuel is preparing for a speech at a town hall meeting. He knows that he is one of the last speakers on the agenda, and he has only been given five minutes to speak. Samuel decides that he will tell a story about his family that he believes many in the audience will relate to. He hopes the story will leave the audience with a sense of anger. Which one of the following modes of persuasion is Samuel using? Select one: A. Axios B. Pathos C. Ethos D. Logos - answerPathos Samuel is making use of pathos or emotion. By telling a relatable story, he is likely to stir up people's emotions. Leaving with a sense of fear, they are more likely to remember what was said and take action. Elliott Industries has just invested a large sum in new, highly-sophisticated computer equipment and building renovations. The building renovations created an airtight, oxygen-free, vacuum-sealed room to house the expensive equipment. For fire losses initiating in that room, the airtight, oxygen-free, vacuum-sealed room is an example of Select one: A. Loss prevention. B. Avoidance. C. Loss reduction D. Separation. - answerLoss prevention For fire losses, the airtight, oxygen-free, vacuum-sealed room is an example of loss prevention Which one of the following statements best describes the shareholders' equity section of the balance sheet? Select one: A. Shareholders' equity decreases by the amount of debt satisfied during the year. B. Shareholders' equity is negative when the entity reports a net loss for the year. C. Shareholders' equity is negative when liabilities exceed assets. D. Shareholders' equity is an asset of the business entity. - answerShareholders' equity is negative when liabilities exceed assets Geneva Trucking installed telematics devices in all of its trucks. The sensors in two trucks indicate a frequency of hard braking. Which one of the following types of indicator does this information provide for Geneva Trucking? Select one: A. Control indicator B. Generic indicator C. Leading indicator D. Lagging indicator - answerLeading indicator The information from the telematics devices provides a leading indicator for Geneva. Leading indicators identify issues before losses occur. By providing safety training for the drivers of these two trucks, the organization may be able to prolong the life of the brakes, and prevent accidents on the road. The broad form of the hold-harmless agreement attempts to Select one: A. Place all responsibility for negligent acts on the transferor. B. Place all financial consequences of potential losses on the transferee. C. Transfer all financial consequences of potential losses to the transferor. D. Eliminate the possibility of negligence on the part of the transferee. - answerPlace all financial consequences of potential losses on the transferee. HVAC Supply Company has decided to promote a new brand of air conditioning unit. The manufacturer of the new units claims that they are lighter, more efficient, and less expensive than the two well-known brands that HVAC Supply Company currently sell to customers. HVAC Supply Company is hoping that the lower cost will attract new customers. HVAC Supply Company will be exposed to which one of the following types of strategic risk? Select one: A. Acquisition risk B. Marketing risk C. Liquidity risk D. Procurement risk - answerMarketing risk