CISR - Elements of Risk Management CH 1 Exam 56 Questions with Answer,100% CORRECT

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CISR - Elements of Risk Management CH 1 Exam 56 Questions with Answer Risk - CORRECT ANSWER condition of either positive or negative uncertainty arising from a given set of cirumstances pure ri... sk - CORRECT ANSWER chance of loss or no loss speculative risk - CORRECT ANSWER chance of loss, no loss, or gain loss - CORRECT ANSWER reduction in asset value exposure - CORRECT ANSWER situation, practice or condition that MAY lead to a loss peril - CORRECT ANSWER cause of loss hazard - CORRECT ANSWER increases the likelihood that a peril will occur physical hazard - CORRECT ANSWER smoking, spills moral hazard - CORRECT ANSWER dishonesty or other behaviors that lead to a loss morale hazard - CORRECT ANSWER insureds neglect or feel indifferent toward their possessions because losses will be covered true or false: a hazard is a cause of loss - CORRECT ANSWER false; peril true or false: a situation, behavior or condition that may lead to adverse financial consequences is an exposure - CORRECT ANSWER true true or false: a cyberattack is an example of an exposure - CORRECT ANSWER false; peril true or false: a spill on a supermarket aisle is an example of a hazard because it increases the likelihood that someone will fall - CORRECT ANSWER true true or false: an insured who shows no regard for his insured property demonstrates a morale hazard - CORRECT ANSWER true incident - CORRECT ANSWER event that MAY lead to a loss or a claim accident - CORRECT ANSWER always unexpected and unintentional that tends to result in damage or injury occurrence - CORRECT ANSWER an "accident" that occurs overtime claim - CORRECT ANSWER demand for payment or a company's obligation to pay as a result of a loss or occurrance a passenger enters an elevator. his clothing is caught in the elevator door as the door closes. the passenger snatches the clothing from the door before the elevator begins to move. he is uninjured and his clothes are not damaged. this is an example of: - CORRECT ANSWER incident a mixing paddle on a faulty bakery mixer snaps and strikes an employee's hand. the employee's hand is cut and bleeding. this is an example of: - CORRECT ANSWER accident a driver is at fault in a minor auto accident. the other driver is uninjured, but the bumper on her car required repairs. the other driver demands that the at-fault driver's insurance co. pay for the loss. this is an example of: - CORRECT ANSWER claim frequency - CORRECT ANSWER number of claims that occur or that insurer expects to occur in a given period of time severity - CORRECT ANSWER aggregate collar amount of all losses in a given period of time severity formula - CORRECT ANSWER total amount of losses/number of claims = average severtiy expected losses - CORRECT ANSWER an estimate of total losses of a given type of insurance co. can expect in a given period expected losses formula - CORRECT ANSWER estimate of loss frequency x estimate of loss severity = expected losses risk apetite - CORRECT ANSWER willingness to accept or tolerate a risk risk ability - CORRECT ANSWER or capacity, the ability or inability to self-insure 5 steps of the risk management process - CORRECT ANSWER 1. risk identification 2. risk analysis 3. risk finance or control 4. risk administration risk identification - CORRECT ANSWER first and most important, risk manager identifies and examines an organizations exposures risk analysis - CORRECT ANSWER asses the potential impact of those exposures that were identified qualitative - CORRECT ANSWER definition/descriptions; information can come from case studies, interviews, historical analysis, cultural customs quantitative - CORRECT ANSWER measuring/numbers risk control - CORRECT ANSWER applies a set of methods or actions intended to minimized or avoid the impact of loss the human approad - CORRECT ANSWER focuses on people's behaviors the engineering approach - CORRECT ANSWER focuses on objects and operations the systems approach - CORRECT ANSWER pays attention to procedures and policies, as well as negligent supervision 6 risk control techniques - CORRECT ANSWER 1. avoidance 2. preventions 3. reduction 4. segregation 5. duplication 6. transfer 2 types of transfer risk control technique - CORRECT ANSWER physical and contractual avoidance - CORRECT ANSWER the elimination of risk prevention - CORRECT ANSWER a response to a focus on the frequency with which events occur reduction - CORRECT ANSWER a response to a focus on the severity of incidents in an effort to recognize risk and take actions to fewer losses segregation - CORRECT ANSWER the isolation of an exposure from other exposures, perils, or hazards seperation - CORRECT ANSWER the process of spreading exposures or activities over several locations duplication - CORRECT ANSWER creating asset back-ups transfer - CORRECT ANSWER the shift of function, exposure, or responsibility of certain liabilities to another party risk financing - CORRECT ANSWER acquisition of internal and external funds at the most favorable cost to pay losses retention - CORRECT ANSWER internal funds being used to pay losses risk administration - CORRECT ANSWER the ongoing implementation and monitoring of risk management programs, policies, and procedures true or false: perceptions of risk depend upon an individual's job function or area of expertise - CORRECT ANSWER true a risk manager may define risk as the person or property exposed to a potential loss - CORRECT ANSWER true pure risks include threats to property and people as well as __________ - CORRECT ANSWER liability the result of pure risk is some: - CORRECT ANSWER measure of loss speculative risk is associated with ___________ or __________ risk - CORRECT ANSWER business or financial examples of loss: a) a business interruption b) physical property damage c) injury to an employee or customer d) all of the above - CORRECT ANSWER d) all of the above [Show More]

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