CISR - Elements of Risk Management QUESTIONS WITH
ANSWERS RATED A+
An event that disrupts normal activities and may become a loss or business interruption -
incident
A demand for payment or an obligation to pay as a result of a loss or occurrence - claim
A situation, practice, or condition that may lead to an adverse financial consequence or loss; an
activity or resource; people or assets - exposure
A reduction in value - loss
An accident with the limitation of time removed; an "accident" extended over a period of time
rather than a single, observable event - occurrence
A condition or characteristic that may create or increase the likelihood or severity of a loss -
hazard
A response to a focus on the frequency with which events occur - Prevention
The isolation of an exposure from other exposures, perils, or hazards - Segregation
Creating asset back-ups - Duplication
A response to a focus on the severity of incidents in an effort to recognize risk and take action to
lower losses - Reduction
The shift of function, exposure, or responsibility of certain liabilities to another party - Transfer
The elimination of risk - Avoidance
The process of spreading exposures or activities over several locations - Separation
Risk is defined as a condition of either positive or negative ____ arising from a given set of
circumstances - uncertainty
Perceptions of risk depend upon an individual's job function or area of expertise. - True
A risk manager may define risk as the person or property exposed to a potential loss - True
Pure risks include threats to property and people, as well as ___ - Liability
, The result of a pure risk is some _____ - Measure of Loss
Unlike pure risk, _____ presents the opportunity for gain - Speculative Risk
Speculative risk is associated with _____ or _____ risk. - Business, Financial
A situation, practice, or condition that may lead to an insured's susceptibility to adverse financial
consequences or loss is called a(n) - exposure
A ____ is a cause of loss - peril
A(n) ____ is a factor that increases the likelihood that a peril will occur. - hazard
A(n) _____ is an event that may lead to a loss or a claim, or an event that may cause a business
interruption - Incident
A(n) _____ is always an unexpected and unintentional event that tends to result in damage or
injury. - Accident
An "accident" that occurs over an extended period of time is called a(n) _____ - occurrence
The number of claims that occur or that an insurer expects to occur within a given period of time
is labeled _____ - frequency
The dollar amount inflicted by a given loss or catastrophe, or the aggregate dollar amount of all
losses for a given period of time, is defined by the word _____ - severity
_____ describes an organization's ability or inability to assume financial responsibility for loss -
Risk Ability
_______ is the implementation of a process intended to minimize the uncertainty of exposures
that can adversely affect an individual's or an organization's assets and financial well-being -
Risk Management
Steps of the Risk Management Process - 1. Risk Identification 2. Risk Analysis 3. Risk Control
4. Risk Financing 5. Risk Administration
The best method of risk control is ______, or the elimination of risk. - avoidance
______ involves isolating an exposure from other exposures, perils, or hazards. - Segregation
The two types of risk transfer are ____ and ____ - Physical, Contractual
The ongoing implementation and monitoring of the risk management process management
process is called _____ - Risk Administration
ANSWERS RATED A+
An event that disrupts normal activities and may become a loss or business interruption -
incident
A demand for payment or an obligation to pay as a result of a loss or occurrence - claim
A situation, practice, or condition that may lead to an adverse financial consequence or loss; an
activity or resource; people or assets - exposure
A reduction in value - loss
An accident with the limitation of time removed; an "accident" extended over a period of time
rather than a single, observable event - occurrence
A condition or characteristic that may create or increase the likelihood or severity of a loss -
hazard
A response to a focus on the frequency with which events occur - Prevention
The isolation of an exposure from other exposures, perils, or hazards - Segregation
Creating asset back-ups - Duplication
A response to a focus on the severity of incidents in an effort to recognize risk and take action to
lower losses - Reduction
The shift of function, exposure, or responsibility of certain liabilities to another party - Transfer
The elimination of risk - Avoidance
The process of spreading exposures or activities over several locations - Separation
Risk is defined as a condition of either positive or negative ____ arising from a given set of
circumstances - uncertainty
Perceptions of risk depend upon an individual's job function or area of expertise. - True
A risk manager may define risk as the person or property exposed to a potential loss - True
Pure risks include threats to property and people, as well as ___ - Liability
, The result of a pure risk is some _____ - Measure of Loss
Unlike pure risk, _____ presents the opportunity for gain - Speculative Risk
Speculative risk is associated with _____ or _____ risk. - Business, Financial
A situation, practice, or condition that may lead to an insured's susceptibility to adverse financial
consequences or loss is called a(n) - exposure
A ____ is a cause of loss - peril
A(n) ____ is a factor that increases the likelihood that a peril will occur. - hazard
A(n) _____ is an event that may lead to a loss or a claim, or an event that may cause a business
interruption - Incident
A(n) _____ is always an unexpected and unintentional event that tends to result in damage or
injury. - Accident
An "accident" that occurs over an extended period of time is called a(n) _____ - occurrence
The number of claims that occur or that an insurer expects to occur within a given period of time
is labeled _____ - frequency
The dollar amount inflicted by a given loss or catastrophe, or the aggregate dollar amount of all
losses for a given period of time, is defined by the word _____ - severity
_____ describes an organization's ability or inability to assume financial responsibility for loss -
Risk Ability
_______ is the implementation of a process intended to minimize the uncertainty of exposures
that can adversely affect an individual's or an organization's assets and financial well-being -
Risk Management
Steps of the Risk Management Process - 1. Risk Identification 2. Risk Analysis 3. Risk Control
4. Risk Financing 5. Risk Administration
The best method of risk control is ______, or the elimination of risk. - avoidance
______ involves isolating an exposure from other exposures, perils, or hazards. - Segregation
The two types of risk transfer are ____ and ____ - Physical, Contractual
The ongoing implementation and monitoring of the risk management process management
process is called _____ - Risk Administration
