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CPCU 500 Exam Questions With Correct
Answers. - Managing Evolving Risks
Which one of the following statements about the use of drones is true? - answer✔Drones may
be equipped with cameras that relay data in real-time
Which one of the following uses infrared light to detect nearby objects? - answer✔Lidar
AMRM Insurance Company sells insurance in Virginia, North Carolina, South Carolina, and
Georgia. The company has compiled a policyowner data base that can be used to send text
messages when hurricanes approach. The company provides early warnings, storm updates
from the National Weather Service, and hurricane safety measures. The company credits the
system with reduced hurricane claims. The use of the texting system is an example of -
answer✔Preventive analytics
Clear-Rite Company specializes in the clean-up of hazardous chemical spills. Workers
performing clean-up operations must use safety suits to prevent exposure to the chemicals. The
suits include pulse and respiration monitors, body temperature sensors, and chemical sensors.
The monitors and sensors report data to a mobile operations center which is deployed to each
clean-up site. The pulse and respiration monitors and the sensors that are part of the protective
gear are called - answer✔Wearable technologies
The traditional definition of risk management reflects the traditional concept of risk as -
answer✔Negative
WOTF is true regarding the evolution of risk and risk management? - answer✔The definition of
risk has evolved to included +/- attributes
Many auto manufacturers have automated a portion of their assembly lines by introducing a
smart product. The smart product performs repetitive tasks, such as making the same weld on
each vehicle frame as it passes the smart product. These smart products, which can be fixed or
mobile, reduce repetitive motion injuries that humans might suffer. They can also be used to
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perform dangerous tasks and in heavy-lifting jobs. These smart products are called -
answer✔Robots
Which one of the following is described as a distributed database that serves as a collectively
shared ledger? - answer✔Blockchain
Autonomous Vehicle Applications (AVA) is a start-up company that develops safety
technologies that can be sold to companies that are producing autonomous vehicles. One
technology AVA is developing allows an autonomous vehicle to detect, extract, and analyze
images; and then to respond to the images. For example, the technology would detect a
presence in a crosswalk, extract the image, and a computer would analyze the image. When the
image was determined to be a human being, the vehicle would slow down or stop until the
crosswalk was clear. This technology, which is designed to capture and analyze images, and to
act on the recognition of the image; is called - answer✔Computer vision
Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out a need for
many organizations to evaluate and manage their - answer✔Supply-chain risk
Which one of the following best explains how most smart products potentially improve risk
management? - answer✔They generate big data to which advanced analytics can be applied
Take Your Order (TYO) is a company that specializes in taking product orders for vendors. The
manufacturer of a product can run a television or internet ad for a product with a toll-free
number. Customer calls for the products are routed to TYO, where one hundred operators are
available to receive the calls. Each operator is assigned a cubicle with a computer terminal,
video display monitor, and a telephone. TYO experienced high workers compensation claims
from its operators, claiming neck strain, eye strain, and wrist pain. In an effort to reduce such
injuries, TYO evaluated each operator's work area. The height of chairs and video monitors
were adjusted, curved computer keyboards and wrist-rests were provided, and the telephones
were replaced with audio headsets. Workers compensation costs dropped significantly. The
science of designing work spaces based on interaction between people and the equipment in
the work s - answer✔Ergonomics
Don is the Risk Manager for Rafferty Corporation. One of his peers, Sally, asks him one day,
"How do you define risk?" When Don replies, which one of the following statements is
accurate? - answer✔Risk has different meanings within the risk management and insurance
communities.
In an effort to reduce expenses, increase profitability, and reduce human errors; ABC Insurance
Company decided to automate most of its personal lines underwriting function. The company
now uses standardized application forms that are submitted electronically to one of the
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company's regional offices. At each regional office, a computer with a scanner reads the
applications. The computer has been programmed with acceptable answers to the questions. If
the answers on the application are all acceptable, the policy is automatically issued. Rejected
applications are automatically forwarded to a human underwriter who reviews them. The use
of this technology has reduced the company's expense ratio by two and a half percent, and
reduced the time it takes to issue a policy. ABC Insurance Company's use of computers to
evaluate applications electronically is an application of - answer✔Artificial intelligence
A municipal water plant installed water flow sensors and water pressure sensors on the water
pipes leaving the plant. The sensors make sure water is flowing properly and that there are no
leaks or clogs which could produce a loss. These types of sensors are - answer✔Mechanical
sensors
Which one of the following is a tool that can be used by fraud investigators to compare
documents and analyze notes? - answer✔Text mining
Last year, three Metro City firemen died responding to a fire at a chemical plant, when they
were overcome by toxic fumes. In response, Metro City is purchasing advanced first responder
gear. It includes special flame retardant suits with chemical and explosive fume sensors, air
quality sensors, and heat sensors. Responders will also wear special watches that will track a
responder's pulse, respiration, and blood pressure; and helmets that include video cameras. All
of these sensors will feed data to a computer in real-time. The computer will analyze the data
and issue threat levels and evacuation orders, if necessary. The protective gear Metro City will
purchase and the data transmission and analysis capability illustrate the use of - answer✔Smart
products
Precision Electronic Components manufactures circuit boards, microchips, and other electronic
products. Given the precision necessary for their products, the manufacturing environment
must be controlled. Temperature, humidity, static electricity and other factors must be
monitored. After losing several batches of products due to human monitoring failures and
imprecise adjustments, the company moved to a system of sensors. The sensors monitor and
regulate temperature, humidity, static electricity, and other factors. The sensors transmit data
to and from each other, and the manufacturing environment is continuously adjusted to assure
production is successful. The network of sensors transmitting data and the autonomous
corrective actions without human interaction is called - answer✔The Internet of Things
Mutual Fund Company (MFC) offers a wide array of mutual fund options to investors. Each
mutual fund has a different fund objective and set of investment guidelines that apply to the
fund. While MFC gives considerable freedom to its fund portfolio managers, they are required
to abide by the fund's investment guidelines. To monitor compliance, MFC developed a
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computer algorithm. The computer algorithm continuously monitors each fund's compliance
with investment guidelines. If a fund manager violates the investment guidelines, the computer
immediately notifies MFC's internal control director, and corrective action is taken. MFC's use
of the computer algorithm to monitor investment compliance and to provide notification when
corrective action is necessary illustrates use of - answer✔Artificial intelligence
Data Entry Company (DEC) offers customers data entry services. A customer can hire DEC to
enter survey data to be analyzed. Many DEC employees spend long hours entering data on a
computer. DEC has experienced neck strain and wrist pain complaints from their employees,
increasing the company's workers compensation costs. DEC investigated the complaints of its
data-entry employees. DEC adopted curved keyboards for data entry, wrist-rests for those
entering data, and uniform chair heights and display monitor heights to reduce neck strain
claims. The science of designing work spaces based on the health concerns of those who will
operate in the work space is called - answer✔Ergonomics
WOTF is an ex of wearable? - answer✔Helmets that monitor fatigue
The National Ocianic (NOA) Monitors tsunami risk. Using the tsunami detection buyous (smart
prod) illustrates - answer✔CAT management
WOTF data capture tools has led to an explosion of risk management innovation by allowing
smart products to transmit data? - answer✔Internet of Things
The diff between risk tech & insuretech is - answer✔Risk tech goes beyond insuretech by
expanding its focus to making risk financing more efficient & preventing & mitigating losses in a
variety of indv.
Risk managers today differ from traditional risk managers in WOTF ways? - answer✔They
attempt to min threats & optimize opportunities
In addition to metal detectors, many airports have installed a 2nd type of scanning tech 4
checked baggage & cargo to detect explosives based on air samples. Which sensor used for risk
assemt and control? - answer✔Biochemical sensors (home diagnosis tests, wearable fitness
monitors, diabetes tests)
William is a risk manager for Green Mountain Trucking. He has always analyzed auto loss
frequency and severity rates for the fleet. William would like to collect data on vehicle speeds,
braking patterns, and distance traveled and compare that with the loss history. Which one of
the following would help William capture and analyze this data? - answer✔Vehicle Telematics
Southwest Interstate Railroad (SIR) is concerned about the number derailments in recent years.
It's not cost effective to use human assets to inspect tracks, bridges, and trestles. Instead, SIR
