RMI 2101 UPDATED 2026 EXAM SCRIPT QUESTIONS
AND ANSWERS RATED A+
✔✔What is risk management in terms of decision making? - ✔✔managing pure risk
events or activities facing a firm or organization; implementing decisions that minimize
frequency or severity of loss
✔✔What steps are involved in the Risk Management Process - ✔✔1. Identify Loss
Exposure
2. Analyze Loss exposure
3. Examine feasibility of risk management techniques
4. Select the appropriate technique
5. implement the technique
6. monitoring results and revising the program
✔✔Risk Manager - ✔✔Functional area of a firm
✔✔Loss Exposure - ✔✔any situation that presents a possibility of loss, whether it
occurs or not
✔✔What are the elements or dimensions of loss exposure? - ✔✔Property, liability,
Personnel, Net income
✔✔Property Loss exposure - ✔✔the possibility that a person or organization will sustain
a loss resulting from damage to property in which they have a financial interest
✔✔What is an example of Property Loss exposure - ✔✔Grandparents giving you a
beach house when they pass so you keep it tidy
✔✔Tangible Property - ✔✔physical form of a property
✔✔Intangible Property - ✔✔Property that has no physical form; copyrights or patent
✔✔Real property - ✔✔Tangible property consisting of land, all structures permanently
attached to the land, and whatever is growing on the land.
✔✔Personal Property - ✔✔can be both intangible or tangible property that's not real
property; your cell phone
✔✔Liability loss exposure - ✔✔a condition that presents the possibility that a person or
an organization will sustain a loss resulting from a claim made against that person or
organization by someone seeking money damages or some other legal remedy
, ✔✔Personnel loss exposure - ✔✔A condition that presents the possibility of loss
caused by a person's death, disability, retirement, or resignation that deprives an
organization of the person's special skill or knowledge that the organization cannot
readily replace.
✔✔personal loss exposure - ✔✔financial loss to and individual or a family by cause of
death, sickness, injury, or unemployment
✔✔net income loss exposure - ✔✔possibility of loss caused by a reduction of income;
perils and hazard can reflect in this exposure;
✔✔How does Personnel loss exposure relate to net income loss exposure? - ✔✔Due to
losing a significant member of an organization, the organization may lose value
because that key* or Vital person is not available
✔✔How to Value Net income Losses? - ✔✔Revenue Minus expenses
✔✔Strict Liability - ✔✔Liability imposed by a court even though the defendant acted
neither negligently nor with intent to cause harm
✔✔Good Example of Strict Liability - ✔✔If you own wild animals and it bites someone ,
its your fault
✔✔Product Liability exposure - ✔✔loss exposure arises out of injury or damage that
results from defective or inherently dangerous products
✔✔product recall - ✔✔recalling a product due to it being defective (Galaxy 7 exploding,
Tylenol)
✔✔What is the main difference between Enterprise Risk Management and Traditional
risk Management - ✔✔TRM focuses on managing hazard risk while ERM expands on
an integrated holistic approach across all business segments of a organization
✔✔Diversifiable Risk - ✔✔risk that affects only some individuals, businesses, or small
group
✔✔no diversifiable risk - ✔✔affects large segments at a time; Hurricane sandy
✔✔Bailee - ✔✔The party temporarily possessing the personal property in a bailment.;
owner lets you mow the lawn
✔✔Bailor - ✔✔the party who temporarily gives up possession of the property; owner
AND ANSWERS RATED A+
✔✔What is risk management in terms of decision making? - ✔✔managing pure risk
events or activities facing a firm or organization; implementing decisions that minimize
frequency or severity of loss
✔✔What steps are involved in the Risk Management Process - ✔✔1. Identify Loss
Exposure
2. Analyze Loss exposure
3. Examine feasibility of risk management techniques
4. Select the appropriate technique
5. implement the technique
6. monitoring results and revising the program
✔✔Risk Manager - ✔✔Functional area of a firm
✔✔Loss Exposure - ✔✔any situation that presents a possibility of loss, whether it
occurs or not
✔✔What are the elements or dimensions of loss exposure? - ✔✔Property, liability,
Personnel, Net income
✔✔Property Loss exposure - ✔✔the possibility that a person or organization will sustain
a loss resulting from damage to property in which they have a financial interest
✔✔What is an example of Property Loss exposure - ✔✔Grandparents giving you a
beach house when they pass so you keep it tidy
✔✔Tangible Property - ✔✔physical form of a property
✔✔Intangible Property - ✔✔Property that has no physical form; copyrights or patent
✔✔Real property - ✔✔Tangible property consisting of land, all structures permanently
attached to the land, and whatever is growing on the land.
✔✔Personal Property - ✔✔can be both intangible or tangible property that's not real
property; your cell phone
✔✔Liability loss exposure - ✔✔a condition that presents the possibility that a person or
an organization will sustain a loss resulting from a claim made against that person or
organization by someone seeking money damages or some other legal remedy
, ✔✔Personnel loss exposure - ✔✔A condition that presents the possibility of loss
caused by a person's death, disability, retirement, or resignation that deprives an
organization of the person's special skill or knowledge that the organization cannot
readily replace.
✔✔personal loss exposure - ✔✔financial loss to and individual or a family by cause of
death, sickness, injury, or unemployment
✔✔net income loss exposure - ✔✔possibility of loss caused by a reduction of income;
perils and hazard can reflect in this exposure;
✔✔How does Personnel loss exposure relate to net income loss exposure? - ✔✔Due to
losing a significant member of an organization, the organization may lose value
because that key* or Vital person is not available
✔✔How to Value Net income Losses? - ✔✔Revenue Minus expenses
✔✔Strict Liability - ✔✔Liability imposed by a court even though the defendant acted
neither negligently nor with intent to cause harm
✔✔Good Example of Strict Liability - ✔✔If you own wild animals and it bites someone ,
its your fault
✔✔Product Liability exposure - ✔✔loss exposure arises out of injury or damage that
results from defective or inherently dangerous products
✔✔product recall - ✔✔recalling a product due to it being defective (Galaxy 7 exploding,
Tylenol)
✔✔What is the main difference between Enterprise Risk Management and Traditional
risk Management - ✔✔TRM focuses on managing hazard risk while ERM expands on
an integrated holistic approach across all business segments of a organization
✔✔Diversifiable Risk - ✔✔risk that affects only some individuals, businesses, or small
group
✔✔no diversifiable risk - ✔✔affects large segments at a time; Hurricane sandy
✔✔Bailee - ✔✔The party temporarily possessing the personal property in a bailment.;
owner lets you mow the lawn
✔✔Bailor - ✔✔the party who temporarily gives up possession of the property; owner
