CPCU 500 Practice Exam 3 QUESTIONS WITH CORRECT DETAILED ANSWERS LATEST Update

CPCU 500 PRACTICE EXAM 3 QUESTIONS WITH CORRECT
DETAILED ANSWERS LATEST UPDATE



1. Which one of the following technologies can provide the infrastructure upon which smart
contracts are built and implemented?
Select one:
A. Wearables
B. Telematics
C. Blockchain
D. Machine learning - ANS ✔ - C. Blockchain



2. Leasing is a useful noninsurance risk control transfer because
Select one:
A. The lessor loses the ability to use the property for the remainder of the lease in the
event of damage to the property.
B. The lessee stands to lose the property's rental income in the event of damage to the
property.
C. The lessee retains the loss exposures resulting from property destruction.
D. Certain loss exposures accompany property ownership but do not accompany its use or
occupancy. - ANS ✔ - D. Certain loss exposures accompany property ownership but do
not accompany its use or occupancy.



3. The control technique that disperses a particular asset or activity over several locations and
regularly relies on that asset or activity as a part of an organization's working resources is which
one of the following?
Select one:
A. Risk transfer
B. Duplication
C. Diversification
D. Separation - ANS ✔ - D. Separation



4. Oscar's custom-built vehicle looks like a sausage sandwich on wheels. He plans to drive it to
special events at schools around the country where it will serve as a mobile billboard to promote
his product. Oscar is surprised to learn that insurers are reluctant to insure his vehicle because it
fails to meet one of the ideal characteristics of an insurable risk. Which characteristic is Oscar's
vehicle least likely to meet?
Select one:
A. Pure risk
B. Large number of similar exposure units
C. Definite and measurable

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, D. Independent and not catastrophic - ANS ✔ - B. Large number of similar exposure units



5. Hold-harmless agreements are
Select one:
A. Comprised of two parties—the indemnitor and the indemnitee.
B. Enforceable without legal consideration.
C. Highly regulated.
D. Standardized. - ANS ✔ - A. Comprised of two parties—the indemnitor and the
indemnitee.



6. Telematics devices allow organizations to accurately identify patterns of risk and predict risk for
which one of the following types of loss exposures?
Select one:
A. Business income
B. Property
C. Workers compensation
D. Automobile - ANS ✔ - D. Automobile



7. Emerald Industries has just invested a large sum in new, highly-sophisticated computer
equipment and building renovations. Emerald installed state-of-the-art smoke detection devices
throughout the facility. Emerald's state-of-the-art smoke detection devices are an example of
Select one:
A. Duplication.
B. Loss prevention.
C. Loss reduction.
D. Avoidance. - ANS ✔ - C. Loss reduction.



8. Commercial general liability insurance policies written on an occurrence basis apply to bodily
injury and property damage that occurs during the policy period. This provision supports the
principle that insurable loss exposures must ideally be
Select one:
A. Fortuitous.
B. Definite.
C. Independent.
D. Pure risks. - ANS ✔ - B. Definite.



9. An organization may use a large deductible plan to achieve the purpose of which one of the
following?
Select one:
A. Defer cash outflows for retained loss reserves.
B. Avoid paying residual market loadings in all jurisdictions

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