CRM PRINCIPLES OF RISK MANAGEMENT EXAM REVIEW SHEET COMPLETE QUESTIONS
ANSWERS GRADED A PLUS
Question:
Speculative risk
Answer:
A chance of loss, no loss, or gain.
Question:
Business risk
Answer:
Risk that is inherent in the operation of a particular organization, including the possibility of loss, no
loss, or gain.
Question:
Enterprise risk management
Answer:
An approach to managing all of an organization's key business risks and opportunities with the
intent of maximizing shareholder value. Also known as enterprise-wide risk management.
Question:
Risk
Answer:
Uncertainty about outcomes that can be either negative or positive.
,Question:
Risk management
Answer:
The process of making and implementing decisions that will minimize the adverse effects of
accidental losses on an organization. The process of making and implementing decisions that enable
an organization to optimize its level of risk.
Question:
Exposure
Answer:
Any condition that presents a possibility of gain or loss, whether or not an actual loss occurs.
Question:
Peril
Answer:
The cause of a loss.
Question:
Hazard
Answer:
A condition that increases the frequency or severity of a loss.
Question:
Physical hazard
Answer:
A tangible characteristic of property, persons, or operations that tends to increase the frequency or
severity of loss.
, Question:
Moral hazard
Answer:
A condition that increases the likelihood that a person will intentionally cause or exaggerate a loss.
Question:
Morale hazard (attitudinal hazard)
Answer:
A condition of carelessness or indifference that increases the frequency or severity of loss.
Question:
Claim
Answer:
A demand by a person or business seeking to recover from an insurer for a loss that may be covered
by an insurance policy.
Question:
Risk management program
Answer:
A system for planning, organizing, leading, and controlling the resources and activities that an
organization needs to protect itself from the adverse effects of accidental losses.
Question:
Frequency
Answer:
Number of losses.
ANSWERS GRADED A PLUS
Question:
Speculative risk
Answer:
A chance of loss, no loss, or gain.
Question:
Business risk
Answer:
Risk that is inherent in the operation of a particular organization, including the possibility of loss, no
loss, or gain.
Question:
Enterprise risk management
Answer:
An approach to managing all of an organization's key business risks and opportunities with the
intent of maximizing shareholder value. Also known as enterprise-wide risk management.
Question:
Risk
Answer:
Uncertainty about outcomes that can be either negative or positive.
,Question:
Risk management
Answer:
The process of making and implementing decisions that will minimize the adverse effects of
accidental losses on an organization. The process of making and implementing decisions that enable
an organization to optimize its level of risk.
Question:
Exposure
Answer:
Any condition that presents a possibility of gain or loss, whether or not an actual loss occurs.
Question:
Peril
Answer:
The cause of a loss.
Question:
Hazard
Answer:
A condition that increases the frequency or severity of a loss.
Question:
Physical hazard
Answer:
A tangible characteristic of property, persons, or operations that tends to increase the frequency or
severity of loss.
, Question:
Moral hazard
Answer:
A condition that increases the likelihood that a person will intentionally cause or exaggerate a loss.
Question:
Morale hazard (attitudinal hazard)
Answer:
A condition of carelessness or indifference that increases the frequency or severity of loss.
Question:
Claim
Answer:
A demand by a person or business seeking to recover from an insurer for a loss that may be covered
by an insurance policy.
Question:
Risk management program
Answer:
A system for planning, organizing, leading, and controlling the resources and activities that an
organization needs to protect itself from the adverse effects of accidental losses.
Question:
Frequency
Answer:
Number of losses.
