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CPCU 500 Assignment 2 Questions And Answers With Verified Solutions (GRADED A+)
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CPCU 500 Assignment 2 Questions And Answers With Verified Solutions (GRADED A+)
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CPCU 500 Assignment 2 Questions AndAnswers With Verified Solutions
(GRADED A+)
The fundamental purpose of a risk management framework is to
A. Reduce the cost of risk.
B. Define and eliminate potential losses.
C. Maximize profits for all stakeholders.
D. Integrate risk management throughout the organization. - ANSWER✔✔ D.
Integrate risk management throughout the organization.
Risk can be classified as subjective or objective. Which one of the following
statements is correct with respect to these risk classifications?
A. Risk managers focus on objective risk and attempt to avoid allowing subjective
risk to affect their decisions.
B. Individuals' subjective perception of risk in a given set of circumstances is
typically much higher than the objective risk.
C. Subjective risk can exist even where objective risk does not.
D. Subjective risk is risk associated with individuals; objective risk is risk associated
with objects or things. - ANSWER✔✔ C. Subjective risk can exist even where
objective risk does not.
During the past year, International Toys has undertaken four capital projects. The
company has renovated and refurbished one of its aging warehouse buildings. It
has purchased the most recent version of its current order processing computer
software. It has added two trucks to its fleet of delivery vehicles. Lastly, it has
purchased a new production machine that will allow it to launch a new product
line. Which one of the following company projects is the most speculative risk?
, A. The software upgrade
B. The warehouse refurbishment
C. The two new trucks
D. The new production machine - ANSWER✔✔ D. The new production machine
In an effort to grow its personal lines book, an insurer decides to offer discounts
on homeowners and personal auto insurance to the employees of its largest
business lines account. Which one of the following risk measures is most likely to
increase as a result of this marketing decision?
A. Time horizon
B. Volatility
C. Correlation
D. Consequences - ANSWER✔✔ C. Correlation
An organization must meet the standard of care that it owes to others in order to
ensure that
A. Post-loss goals are in place.
B. Contracts are not breached.
C. Legal obligations are satisfied.
D. Operations are efficient. - ANSWER✔✔ C. Legal obligations are satisfied.
Which of the following risk management program goals is an essential goal for all
public entities?
A. Earning stability
B. Continuity of operations
C. Survival
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