CPCU 500 - Full Practice Exam Questions & Solutions
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CPCU - Chartered Property Casualty Underwriter
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CPCU - Chartered Property Casualty Underwriter
CPCU 500 - Full Practice Exam Questions & Solutions
In order to achieve collaboration, group leaders must
A. Remain focused on achieving the goals of their individual groups.
B. Focus on the worker's personality rather than results.
C. Remain focused on preventing stakeholders from straying f...
CPCU 500 - Full Practice Exam
Questions & Solutions
In order to achieve collaboration, group leaders must
A. Remain focused on achieving the goals of their individual groups.
B. Focus on the worker's personality rather than results.
C. Remain focused on preventing stakeholders from straying from the common goal.
D. Promote competition among members of the group. - answer C. Remain focused
on preventing stakeholders from straying from the common goal.
Which of the following risk management program goals is an essential goal for all public
entities?
A. Survival
B. Continuity of operations
C. Growth
D. Earning stability - answer B. Continuity of operations
Which one of the following is described as a distributed database that serves as a
collectively shared ledger?
A. Telematics
B. Big data
C. Blockchain
D. The Internet of Things - answer C. Blockchain
The original cost of a property is known as the
A. Replacement cost.
B. Historical cost.
C. Market value.
D. Tax-appraised value. - answer B. Historical cost.
Which one of the following statements is true if earnings at risk are $200,000 with 90%
confidence?
A. Earnings at risk are projected to be $180,000.
B. Earnings at risk are projected to be less than $200,000 10% of the time.
C. Earnings at risk are projected to be $200,000 90% of the time.
D. Earnings at risk are projected to be greater than $200,000 10% of the time. - answer
B. Earnings at risk are projected to be less than $200,000 10% of the time.
,Which one of the following statements is true regarding event tree analysis?
A. Event tree analysis can be used to select the most effective strategy to achieve a
goal.
B. Event tree analysis provides only quantitative information.
C. Event tree analysis provides only qualitative information.
D. Event tree analysis typically provides only two options, success or failure. - answer
D. Event tree analysis typically provides only two options, success or failure.
Regression analysis assumes that
A. The variable being forecast varies predictably with another variable.
B. Dependent variables are unaffected by independent variables.
C. For any given past year, the projected trend value will be the same as the actual
outcome.
D. The linear regression line is more accurate the further it gets from the actual data
values used. - answer A. The variable being forecast varies predictably with another
variable.
Taylor owns Paoli Hardware, a mid-sized hardware store with 25 employees. Paoli
Hardware has won best local hardware store 3 years in a row. Taylor would like to
expand operations and has undertaken a SWOT analysis.
His most dedicated customers are generally over 40 years old and engaged in small
house projects, but his biggest revenue generator continues to be the sale of lumber.
He would like to obtain more commercial customers and increase lumber sales.
One of the major complaints Taylor hears from his customers is the difficulty finding
local contractors. So, he is considering hiring a general contractor at the store who
would also make house calls to assist customers. This will allow him to bill for labor and
increase the sale of his products, but he is concerned it may increase his insurance
claims and premiums.
One of the younger store employees suggested they create a website to expand sales
to on-line purcha - answer d. Technological advancements
The level of confidence an organization places in the organization's risk management
culture, practices, and procedures is called
A. Risk tolerance.
B. Tolerable uncertainty.
C. Risk assurance.
D. Probable maximum loss. - answer C. Risk assurance.
The process of comparing the key risk indicators of an organization with those of other
organizations in the same industry is known as
A. Hedging.
B. Benchmarking.
,C. Trend analysis.
D. Root cause analysis. - answer B. Benchmarking.
An organization has had a high percentage of repetitive stress injuries to workers in a
particular phase of their production process. The risk manager has been asked to
analyze these injuries from a system safety analysis perspective. Which one of the
following techniques should the risk manager use to investigate these accidents?
A. Failure mode and effects analysis
B. Job safety analysis
C. Future states analysis
D. Strategy analysis - answer B. Job safety analysis
An organization can use securitization to exchange
A. Cash for income-producing assets.
B. Debt for income-producing assets.
C. Income-producing assets for cash.
D. Liabilities for mortgage receivables. - answer C. Income-producing assets for
cash
Which one of the following best explains how most smart products potentially improve
risk management?
A. They assess risks in dangerous areas.
B. They generate big data to which advanced analytics can be applied.
C. They scan and inspect structures for unsafe conditions.
D. They measure worker fatigue. - answer B. They generate big data to which
advanced analytics can be applied.
Tania works in the fraud unit for Greatview Insurance. There is a claimant who appears
to be involved in multiple cases of insurance fraud. Tania decides to use social media to
obtain information that may be used to develop a profile of the claimant. Tania's use of
social media is an example of which one of the following types of data?
A. Unstructured external
B. Unstructured internal
C. Structured internal
D. Structured external - answer A. Unstructured external
Regarding diversifiable and nondiversifiable risk, which one of the following statements
is accurate?
A. An example of a nondiversifiable risk is a fire.
B. Risks must be either diversifiable or nondiversifiable.
C. An example of a diversifiable risk is inflation.
, D. Systemic risks are generally nondiversifiable. - answer D. Systemic risks are
generally nondiversifiable.
Commercial general liability insurance policies written on an occurrence basis apply to
bodily injury and property damage that occurs during the policy period. This provision
supports the principle that insurable loss exposures must ideally be
A. Independent.
B. Definite.
C. Fortuitous.
D. Pure risks. - answer B. Definite.
Which one of the following is a data analysis technique that operates in a way similar to
the human brain?
A. Neural networks
B. Social network analysis
C. Clustering
D. Regression - answer A. Neural networks
Hold-harmless agreements are
A. Enforceable without legal consideration.
B. Highly regulated.
C. Standardized.
D. Comprised of two parties—the indemnitor and the indemnitee. - answer D.
Comprised of two parties—the indemnitor and the indemnitee.
The portion of fire safety that focuses on the minimum building design, construction,
operation, and maintenance requirements necessary to assure occupants of a safe exit
from the burning portion of the building is
A. Fire safety.
B. Occupancy safety.
C. Life safety.
D. COPE safety. - answer C. Life safety.
Nancy, the general liability claims manager, is concerned about a significant rise in
claim frequency in the state of New Jersey during the past 18 months. She cannot
identify the cause of the increase and has asked James, a data analyst, to help. James
decides to develop a model to analyze the dataset of New Jersey claims, and see if any
previously unknown grouping can be identified for further analysis. Which one of the
following data analysis techniques is James using?
A. Cluster analysis
B. Linear regression analysis
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