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CPCU 500 EXAM/123 QUESTIONS AND ANSWERS/100% CORRECT (Foundations of Risk Management & Insurance)
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CPCU 500 EXAM/123 QUESTIONS AND ANSWERS/100% CORRECT (Foundations of Risk Management & Insurance)
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CPCU 500 EXAM/123 QUESTIONS ANDANSWERS/100% CORRECT (Foundations
of Risk Management & Insurance)
probability - -the likelihood that an outcome or event will occur
-pure risk - -a chance of loss or no loss, but no chance of gain
-speculative risk - -a chance of loss, no loss or gain
-credit risk - -the risk that customers or other creditors will fail to make
promised payments as they come due
-subjective risk - -the perceived amount of risk based on an individuals or
organizations opinion
-objective risk - -the measurable variation in uncertain outcomes based on
facts and data
-diversifiable risk - -a risk that affects only some individuals, businesses or
small groups
-systemic risk - -the potential for major disruption in the function of an
entire market or financial system
-market risk - -uncertainty about an investments future value because of
potential changes in the market for that type of investment
-liquidity risk - -the risk that an asset cannot be sold on short notice without
incurring loss
-risk source (ISO3100) - -element ehich alone or in combo has the intrinsic
potential to give rise to risk
-risk management - -the process of making and implementing decisions
that will minimize the adverse effects of accidental losses on an
organization...
-loss exposure - -any condition or situation that presents a possibility of loss
whether or not an actual loss occurs
-hazard - -a condition that increases the frequency or severity of a loss
, -moral hazard - -a condition that increases the likelihood that a person will
intentionally cause or exaggerate a loss
-morale hazard (attitudinal hazard) - -a condition of carelessness or
indifference that increases the frequency or severity of a loss
-physical hazard - -a tangible characteristic of property. persons, or
operations that tends to increase the frequency or severity of a loss
-legal hazard - -a condition of the legal environment that increases loss
frequency or severity
-property loss exposure - -a condition that presents the possibility that a
person or an organization will sustain a liss resulting from damage (including
destruction, taking, or loss of use) to property in which that person or
organization has a financial interest
-tangible property - -property that has physical form
-real property (realty) - -tangible property consiting of land, all structures
permanently attached to the land, and whatever is growing on the land
-personal property - -all tangible property that is not real property
-intangible property - -propery that has no physical form
-liability loss exposure - -any condition or situation that presents the
possibility of a claim alleging legal rsponsibility if a person or business for
injury or damage suffered by another party
-personnel loss exposure - -a condition that presents the possibility of loss
caused by a persons death, diability or retirement, or resignation that
deprives an organization of the persons special skill or knowledge that the
organization cannot readily replace
-personal loss exposure - -any condition or situation that presents the
possibility of financial loss to an individual or a family by such causes as
death, sickness, injury or unemployment
-net income loss exposure - -a condition that presents the possibility of loss
caused by a reduction in net income
-pre-loss goals - -goals to be accomplished before a loss, involving social
responsibility, externally imposed goals, reduction of anxiety and economy
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