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CPCU 500 FINAL EXAM QUESTIONS with Errorless Answers Latest Updates 2024 GRADE A+
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CPCU 500 FINAL EXAM QUESTIONS with Errorless Answers Latest Updates 2024 GRADE A+
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CPCU 500 FINAL EXAM QUESTIONS withErrorless Answers Latest Updates 2024
GRADE A+
Pure Risk correct answers a risk that presents the chance of loss but no opportunity for gain
Speculative Risk correct answers Involves a chance of gain
Ex: Tenant renting; financial investments
Price Risk correct answers Uncertainty of cash flows due to change in raw materials and others
(lumber)
Credit Risk correct answers Relevant for accts receivable (Banks)
Objective Risk correct answers The measurable variation in uncertain outcomes based on facts
and data.
Diversifiable Risk correct answers A risk that affects only some individuals, businesses, or small
groups.
EX: Fire
Non-diversifiable Risk correct answers a risk that affects the entire economy or large numbers of
persons or groups within the economy
EX: Inflation; Unemployment
Market Risk correct answers Uncertainty about an investment's future value because of potential
changes in the market
Systematic risk correct answers A risk that influences a large number of assets, entire market or
financial system. Also, market risk. Generally nondiversifiable
Strategic risk (type of Speculative Risk) correct answers Uncertainties assoc with the
organizations long term goals and mngt decisions.
- Arise from trends in the economy and society, incl economical, political, and competitive env
-uncertainty regarding the firm's financial goals and objectives
Exposure correct answers Any condition that presents a possibility of gain/loss, whether or not
an actual loss occurs.
Volatility correct answers Frequent fluctuations, such as in the price of an asset.
,Time Horizon correct answers Estimated duration
Correlation correct answers relationship between two variables
Operational Risk correct answers uncertainty with procedustres, systems, and policies (banks)
- regarding a financial firm's earnings due to failures in computer systems, errors, misconduct by
employees, floods, lightning strikes and similar events or risk of loss due to unexpected
operating expenses
financial risk (type of spec risk) correct answers uncertainties assoc with organization's financial
actvs
Covariance correct answers Measure of two random risk variables will change in relation to each
others, and its used to calc the correlation (linear relationship) between the variables
EX: Selecting sources of risk for a financial portfolio; Interest rates and bond values
HAZOP (Hazard and Operational Study) correct answers is a comprehensive review of a
process/ system
-Hazard risk is risk of accidental loss, includ possibility of loss/ no loss
Delphi Technique correct answers Uses the opinions of a select group of experts to identify risks
-EX: Confidential questionnaires
Qualitative analysis measures correct answers significant (high/medium/low)
- Reputation & management/ workforce capabilities
quantitative analysis correct answers assigns values/ real numbers to costs
-Financial targets, risk tolerance, threshold
Risk Control correct answers A conscious act or decision not to act that reduces the frequency
and/or severity of losses or makes losses more predictable.
Energy Transfer Theory correct answers states that basic cause of accidents is energy out of
control
EX: Emergency brakes
Technique of Operations Review (TOR) correct answers views cause of accidents to be a result
of management shortcomings
SWOT Analysis correct answers - Strengths: Tech, distribution channels, customer loyalty,
product quality
- Weakness: High cost structures, absence of key skills, staff turnover, brand recognition
- Threats: Shifts in custo tastes
,Change Analysis correct answers Project the effects of a given system change is likely to have on
an existing system
Job safety analysis correct answers Dissects a repetitive task to determine potential hazards if
each action is not performed
EX: Providing Proper Guidance
Domino Theory correct answers emphasizes that every accident sequence begins w/ (-) ancestry/
social environment and ends in injury/ illness
Root Cause Analysis correct answers a process that enables the rm professional to dig past the
obvious causes of an accident to find other factors
Process
1.) Collect Data
2.)Causal Factors (One event causing another)
3.) Identify Root Cause (Mapping/ Flow charting)
4.) Develop Recommend (To prevent accidents)
Smart Products correct answers An innovative item that uses sensors, wireless sensor networks,
data collection, transmission and analysis to further enable the item to be faster, more useful, or
otherwise improved.
Internet of Things correct answers a network of objects that transmit data to and from each other
without human interaction
Cloud Computing correct answers Information, technology, and storage services contractually
provided from remote locations, through the internet or another network, without a direct server
connection.
blockchain correct answers A digital ledger that facilitates secure transactions w/o third party.
(Bitcoin)
Telematics correct answers The use of technological devices in vehicles with wireless
communication and GPS tracking that transmit data to businesses or government agencies; some
return information for the driver.
text mining correct answers Obtaining information through language recognition
insuretech correct answers the use of emerging tech in the insurance industry
Risk Technology correct answers goes one step beyond insurtech by expanding its focus on how
to make risk financing more efficient to include how to prevent and mitigate risk in a variety of
industries.
, sensor/ sensor networks correct answers A device that detects and measures stimuli in its
environment
- transducers, actuators, accelerometers
Preventive Analytics correct answers Statistical and analytical techniques used to influence or
prevent future events or behaviors.
Artificial Intelligence correct answers refers to the ability of machines to simulate human
intelligence
Computer Vision correct answers Used in retain ops for automated checkout lanes, medical
imaging, automotive safety, surveillance, and traffic control
Transducer vs Actuator vs accelerometer correct answers Transducer is a devise that converts
one form of energy into another
Actuator is a mechanical device that turns energy to motion.
accelerometer is a devise that measures acceleration, motion, and tilt
Ergonomics correct answers - they sense, monitor, report, and analyze workers health or well
being and their surrounding env.
The study of workplace equipment design or how to arrange and design devices, machines, or
workspace so that people and things interact safely and most efficiently.
Sensor Categories correct answers Mechanical- Pressure sensors, flow sensors, and motion
detectors
Thermal- Smoke detectors, heat sensors, and computer hardware sensors
Biochemical- Home diagnostic tests, wearable fitness monitor, & diabetes test strips
Radiant- Optical sensors, radar, and radio frequency, ID tags
Risk Treatment (Risk Response Planning) correct answers The selection & implementation of
actions to help manage/ mitigate risk.
Residual Risk correct answers The level of risk remaining after actions are taken to alter the level
of risk.
Loss Prevention (Modify Risk) correct answers decrease frequency of a particular loss
EX: Theft prevention systems
Loss Reduction correct answers A risk control technique that reduces the severity of a particular
loss.
e4x: Sprinkler systems; smoke detectors
Risk Transfer correct answers (Purchasing insurance) shift of risk
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