ARM Practice Exam Questions & Solutions
General Liability Insurance
Covers the insured's legal defense costs when defending against a claim of liability.
Commercial package policies typically include these kind of coverages
business property, liability, and business income
Morale H...
ARM Practice Exam Questions &
Solutions
General Liability Insurance - answer Covers the insured's legal defense costs when
defending against a claim of liability.
Commercial package policies typically include these kind of coverages - answer
business property, liability, and business income
Morale Hazard - answer an insured person's attitude about his belongings.
Product Liability - answer Most general liability insurance policies include coverage
for this
Property Losses - answer In the insurance industry the term "net income losses" is
usually associated with
Avoidance can be called abandonment when the organization - answer A cause of
loss
Avoidance can be called abandonment when the organization - answer Decides to
eliminate an existing loss exposure
Which risk control technique is being used by a manufacturer that installs a wet-pipe
sprinkler system in its warehouse - answer Reduction
The purpose of all workers compensation laws is to provide this - answer Medical
and wage replacement benefits to injured employees.
Integration of the management principles governing the organization with the risk
management process is - answer Risk governance
Based on the ISO 31000 definition of risk assessment, what step includes determining
the level of risk and its potential effects on the organization? - answer Risk Analysis
What is true regarding the International Organization for Standardization's ISO 31000
standard? - answer ISO 31000 applies regardless of whether the risk has positive
and/or negative consequences.
Solvency II includes standards for what that was not addressed in Solvency I? - answer
Risk Management
, Which one of the following statements regarding the scope of ISO 31000 is true? -
answer ISO 31000 may be applied to risks that can have positive consequences.
Based on Basel III principles, what group should take the lead in establishing a strong
risk management culture? - answer Board of directors
What is true about risk management, Solvency II, and Basel II and III standards? -
answer C. Many risk management standards, such as ISO 31000, are voluntary.
What is a key feature of the COSO standard but not other risk management standards?
- answer Control Activites
The requirements of the Sarbanes-Oxley Act are a major reason for the development of
which one of the following? - answer COSO Enterprise Risk Management—
Integrated Framework
Solvency II is a new regulatory standard in the European Union (EU) to establish
principles for risk management and consistency in regulation for what industry? -
answer Insurance
In 1999, the Basel Committee issued a proposal for a revised Capital Adequacy
Framework which consisted of three pillars. One pillar is a review of an institution's
internal assessment process and capital adequacy. This pillar is... - answer
Supervisory
MVS = - answer Fair Value of Assets - Fair Value of Liabilities
Risk managers can have a hard time valuing this kind of property due to the unique
features of each tract - answer Unimproved Land
The measure employed that compares the amount the insurer has paid in losses to the
premiums it has earned - answer Loss Ratio
What kind of organization would most likely be affected by commodity price risk? -
answer A Manufacturer
What type of financial risk has only negative potential? - answer Credit Risk
The fund's manager said that on any given day, there is a 5% probability of losing more
than 3% of the investment's worth. The statistic quoted by the fund manager is - answer
Value At Risk (VaR)
What is true if earnings at risk are $200,000 with 90% confidence? - answer
Earnings at risk are projected to be less than $200,000 10% of the time
Leverage refers to - answer Using borrowed money to invest.
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