CRM PRINCIPLES OF RISK MANAGEMENT EXAM TEST BANK SOLVED QUESTIONS 100
PERCENT CORRECT ANSWERS
Question:
Types of risk
Answer:
Pure and speculative
Question:
Pure
Answer:
Chance of loss or no loss with no chance of gain
Question:
Speculative
Answer:
Chance of loss or no loss or a chance of gain often referred to as a business risk
Question:
Risk management terms
Answer:
Exposure Loss Hazard Peril Incident Accident Occurrence Claim Frequency Severity Expected loss
Question:
Exposure
,Answer:
Situation, practice, or condition that may lead to an adverse financial consequence
Question:
Loss
Answer:
Reduction in value
Question:
Hazard
Answer:
Condition or circumstance that may give rise to a loss from a given peril; physical, moral, or morale
Question:
Peril
Answer:
The cause of loss
Question:
Incident
Answer:
Event that disrupts normal activities and may become a loss, claim, or business interruption
Question:
Total Cost Of Risk TCOR is used as risk management tool to assist with:
Answer:
, 1. Making effective risk management decisions by measuring progress toward risk management
objectives 2. Establishing responsibility and accountability in the workplace, providing management
and employees incentives 3. Effective management of financial budgets and pricing of products and
services 4. Promoting and focusing on safety and loss control by communicating the financial
impact of a loss on the TCOR and sales and revenue
Question:
Steps to measure the impact of a loss on sales and revenue
Answer:
1. Determine the profit margin of the organization 2. Divide the loss cost by the profit margin. The
result is the sales/revenue required to pay for the loss
Question:
Accident
Answer:
An unplanned event that results in BI or PD
Question:
Occurrence
Answer:
An accident that extends over a period of time rather than a single observable happening
Question:
Claim
Answer:
A demand or obligation for payment as a result of a loss
Question:
PERCENT CORRECT ANSWERS
Question:
Types of risk
Answer:
Pure and speculative
Question:
Pure
Answer:
Chance of loss or no loss with no chance of gain
Question:
Speculative
Answer:
Chance of loss or no loss or a chance of gain often referred to as a business risk
Question:
Risk management terms
Answer:
Exposure Loss Hazard Peril Incident Accident Occurrence Claim Frequency Severity Expected loss
Question:
Exposure
,Answer:
Situation, practice, or condition that may lead to an adverse financial consequence
Question:
Loss
Answer:
Reduction in value
Question:
Hazard
Answer:
Condition or circumstance that may give rise to a loss from a given peril; physical, moral, or morale
Question:
Peril
Answer:
The cause of loss
Question:
Incident
Answer:
Event that disrupts normal activities and may become a loss, claim, or business interruption
Question:
Total Cost Of Risk TCOR is used as risk management tool to assist with:
Answer:
, 1. Making effective risk management decisions by measuring progress toward risk management
objectives 2. Establishing responsibility and accountability in the workplace, providing management
and employees incentives 3. Effective management of financial budgets and pricing of products and
services 4. Promoting and focusing on safety and loss control by communicating the financial
impact of a loss on the TCOR and sales and revenue
Question:
Steps to measure the impact of a loss on sales and revenue
Answer:
1. Determine the profit margin of the organization 2. Divide the loss cost by the profit margin. The
result is the sales/revenue required to pay for the loss
Question:
Accident
Answer:
An unplanned event that results in BI or PD
Question:
Occurrence
Answer:
An accident that extends over a period of time rather than a single observable happening
Question:
Claim
Answer:
A demand or obligation for payment as a result of a loss
Question:
