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. - Answers -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. - Answers -A. Quantifying risk.
Which one of the following is measurable and quantifies risk?
A. Probability
B. Possibility
C. Uncertainty
D. Feasibility - Answers -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 - Answers -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. - Answers -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. - Answers -A. Strategic risk.
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 - Answers -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
B. Cloud
C. Artificial intelligence
D. Internet of Things - Answers -D. Internet of Things
Insurers and risk managers can use the large volumes of data collected and organized
through telematics to help improve results for which one of the following types of
insurance?
Select one:
A. Health
B. Workers compensation
C. Automobile
D. Property - Answers -C. Automobile
Organizations find it difficult to establish a benchmark against which the performance of
their risk management program can be assessed because it is difficult to assign a
specific value to the
Select one:
A. Cost of implementing and administering risk management.
B. Cost of measures to prevent or reduce the size of potential losses.
C. Cost of residual uncertainty.
D. Cost of losses not reimbursed by insurance. - Answers -C. Cost of residual
uncertainty.
The two benefits of risk management affecting individuals, organizations, and society
are: it preserves financial resources by reducing expected losses and it
Select one:
A. Reduces the residual uncertainty associated with risk.
, B. Increases productivity within the economy and improves overall standard of living.
C. Increases the attractiveness to investors.
D. Improves the allocation of productive resources. - Answers -A. Reduces the residual
uncertainty associated with risk.
Which one of the following statements is true regarding risk management efforts on the
part of individuals, organizations, and society in general?
Select one:
A. Organizations tend to exhibit a greater degree of risk aversion than do individuals.
B. The benefits that risk management efforts provide to individuals and organizations
are not felt by society in general.
C. Risk management makes those who own or run an organization more willing to
undertake risky activities.
D. Risk management tends to increase the deterrence effect of risk in organizations. -
Answers -C. Risk management makes those who own or run an organization more
willing to undertake risky activities.
Risk management programs should
Select one:
A. Operate economically and efficiently.
B. Incur substantial costs for slight benefits.
C. Be an autonomous part of the organization.
D. Not use benchmarking to compare costs. - Answers -A. Operate economically and
efficiently.
Which of the following risk management program goals is an essential goal for all public
entities?
Select one:
A. Growth
B. Continuity of operations
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