- Study guides, Class notes & Summaries

1. Risk involves the possibility of a negative outcome. Possibility means - ANSWER - That an outcome may or may not occur. 2. Probabilities are stated as decimal figure, a percentage, or a - ANSWER - Fraction 3. To understand risk, one needs to know the probability of an outcome or event occurring. Which one of the following statements is correct with respect to probability? - ANSWER - It can be used to decide which activities to undertake. 4. The statement, "There is a five perce...

6. Which one of the following best explains how most smart products potentially improve risk management? Select one: A. They generate big data to which advanced analytics can be applied. B. They measure worker fatigue. C. They assess risks in dangerous areas. D. They scan and inspect structures for unsafe conditions. - ANS - A. They generate big data to which advanced analytics can be applied. 7. Which one of the following data capture tools has led to an explosion of risk management in...

1. Risk - ANSWER - the uncertainty about outcomes, with the possibility that some of the outcomes can be negative. Quantified by knowing the probability of the possible outcomes 2. Probability - ANSWER - the likelihood that an outcome or event will occur. Probabilities are stated as a decimal figure, a percentage, or a fraction. 3. What are the 2 elements associated with risk? - ANSWER - uncertainty of outcome + possibility of negative outcome 4. Pure Risk - ANSWER - a chance of los...

What are the two elements of risk? - CORRECT ANSWER - -Uncertainty of outcome - Time of the outcome and type of outcome are uncertain -Possibility of a negative outcome - at least 1 outcome is negative What is the difference between probability and possibility? - CORRECT ANSWER - Possibility - an outcome or event may or may not occur. It does not quantify the risk, only verifies the risk is there Probability - the likelihood than an outcome will occur, quantifies the risk. It is measurabl...

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. - ANS - B. The ERM framework encompasses all stakeholders in the organization. A risk management ...

10. The risk of increased competition falls into the category of which quadrant of risk - ANSWER - Strategic Risk 11. Failing to respond to changing customer demand and preferences in the design could drop the market share. Which quadrants of risk is this? - ANSWER - Strategic risk, arise from trends in the economy and society 12. If car is stolen and the tracking device can be used to recover the car more quickly. Which RM technique is this? - ANSWER - Loss reduction 13. How traditi...

1. 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. - CORRECT ANSWER - D. Integrate risk management throughout the organization. 2. 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 objecti...

CPCU 500 - FOUNDATIONS OF RISK MANAGEMENT & INSURANCE: EXAM QUESTIONS WITH COMPLETE SOLUTIONS

CPCU 500 CHAPTERS 1 - 8 TEST QUESTIONS WITH ACCURATE ANSWERS

CPCU 500 EXAM QUESTIONS WITH ACCURATE SOLUTIONS