CISR Elements of Risk Management Exam 200 Practice Questions with Verified
Answers .
CISR Elements of Risk Management - 210 Practice Questions with Answers and
Rationales
Section 1: Introduction to Risk Management (Questions 1-35)
1. Risk is defined as a condition of either positive or negative _____ arising from a
given set of circumstances.
A) Exposure
B) Uncertainty
C) Hazard
D) Peril
Correct Answer: B) Uncertainty
Rationale: Risk fundamentally involves uncertainty about outcomes. The
definition specifically states that risk is a condition of either positive or negative
uncertainty arising from a given set of circumstances. The term does not solely
describe possible negative outcomes; risk outcomes can also be positive .
2. Which of the following best describes pure risk?
A) Risk that presents the opportunity for gain
,B) Risk associated with business and financial decisions
C) Risk that results in some measure of loss
D) Risk that always involves speculative elements
Correct Answer: C) Risk that results in some measure of loss
Rationale: Pure risks include threats to property and people, as well as liability.
Unlike speculative risk, the result of a pure risk is some measure of loss, not the
opportunity for gain .
3. Speculative risk is associated with which types of risk?
A) Physical and legal risk
B) Business and financial risk
C) Social and technological risk
D) Economic and political risk
Correct Answer: B) Business and financial risk
Rationale: Unlike pure risk, speculative risk presents the opportunity for gain and
is associated with business or financial risk .
,4. A situation, practice, or condition that may lead to an adverse financial
consequence or loss is called a(n):
A) Peril
B) Hazard
C) Exposure
D) Incident
Correct Answer: C) Exposure
Rationale: An exposure is a situation, practice, or condition that may lead to an
adverse financial consequence or loss. It can also refer to an activity, resource,
people, or assets .
5. A cause of loss is defined as a(n):
A) Exposure
B) Hazard
C) Peril
D) Incident
, Correct Answer: C) Peril
Rationale: A peril is specifically defined as a cause of loss. For example, fire, wind,
or theft are perils .
6. A factor that increases the likelihood that a peril will occur is called a(n):
A) Exposure
B) Hazard
C) Peril
D) Occurrence
Correct Answer: B) Hazard
Rationale: A hazard is a condition or characteristic that may create or increase the
likelihood or severity of a loss. A spill on a supermarket aisle is an example of a
hazard because it increases the likelihood that someone will fall .
7. An insured who shows no regard for his insured property demonstrates which
type of hazard?
A) Physical hazard
Answers .
CISR Elements of Risk Management - 210 Practice Questions with Answers and
Rationales
Section 1: Introduction to Risk Management (Questions 1-35)
1. Risk is defined as a condition of either positive or negative _____ arising from a
given set of circumstances.
A) Exposure
B) Uncertainty
C) Hazard
D) Peril
Correct Answer: B) Uncertainty
Rationale: Risk fundamentally involves uncertainty about outcomes. The
definition specifically states that risk is a condition of either positive or negative
uncertainty arising from a given set of circumstances. The term does not solely
describe possible negative outcomes; risk outcomes can also be positive .
2. Which of the following best describes pure risk?
A) Risk that presents the opportunity for gain
,B) Risk associated with business and financial decisions
C) Risk that results in some measure of loss
D) Risk that always involves speculative elements
Correct Answer: C) Risk that results in some measure of loss
Rationale: Pure risks include threats to property and people, as well as liability.
Unlike speculative risk, the result of a pure risk is some measure of loss, not the
opportunity for gain .
3. Speculative risk is associated with which types of risk?
A) Physical and legal risk
B) Business and financial risk
C) Social and technological risk
D) Economic and political risk
Correct Answer: B) Business and financial risk
Rationale: Unlike pure risk, speculative risk presents the opportunity for gain and
is associated with business or financial risk .
,4. A situation, practice, or condition that may lead to an adverse financial
consequence or loss is called a(n):
A) Peril
B) Hazard
C) Exposure
D) Incident
Correct Answer: C) Exposure
Rationale: An exposure is a situation, practice, or condition that may lead to an
adverse financial consequence or loss. It can also refer to an activity, resource,
people, or assets .
5. A cause of loss is defined as a(n):
A) Exposure
B) Hazard
C) Peril
D) Incident
, Correct Answer: C) Peril
Rationale: A peril is specifically defined as a cause of loss. For example, fire, wind,
or theft are perils .
6. A factor that increases the likelihood that a peril will occur is called a(n):
A) Exposure
B) Hazard
C) Peril
D) Occurrence
Correct Answer: B) Hazard
Rationale: A hazard is a condition or characteristic that may create or increase the
likelihood or severity of a loss. A spill on a supermarket aisle is an example of a
hazard because it increases the likelihood that someone will fall .
7. An insured who shows no regard for his insured property demonstrates which
type of hazard?
A) Physical hazard
