Page 1 of 87
CISR Elements of Risk Management ALL 400
QUESTIONS AND CORRECT ANSWERS LATEST
UPDATE THIS YEAR
QUESTION: 1. A company outsources the shipping of its product so that it no longer has a
transportation exposure. This illustrates which risk control technique?
Prevention
Transfer
Reduction
Avoidance - ANSWER-Transfer
QUESTION: 2. A company stores its finished inventory in regional locations. This illustrates
which risk control technique?
Separation
Segregation
Duplication
Transfer - ANSWER-Separation
1
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QUESTION: 3. Martha is building her risk management team. She is looking for a team member
who can help her calculate development factors. This duty would be performed by which of the
following team members?
Accountant
Agent or broker
Actuary
RMIS provider - ANSWER-Actuary
QUESTION: 4. The four logical classifications of exposures are used during the __________ step
of the risk management process.
Identification
Analysis
Administration
Control - ANSWER-Identification
2
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QUESTION: 5. Nicholas believes that the risk control program he has implemented will greatly
reduce the frequency and severity of losses at his company. He now wants to choose an
insurance plan that will be the most cost-effective, taking into consideration the lower
frequency and severity of losses, while maintaining some carrier services. Which plan would he
choose?
Deductible Plan
Dividend Plan
Guaranteed Cost Plan
Self-Insurance - ANSWER-Deductible Plan
QUESTION: 6. Which one of the following does not demonstrate a purpose of quantitative
analysis?
Using loss data to determine what caused the "back strain" losses.
Using loss data to assist in forecasting next year's slip-and-fall losses.
You use loss data to decide which risks should be transferred to the insurance company.
Using loss data to determine which improvement projects to fund. - ANSWER-Using loss data to
determine what caused the "back strain" losses.
3
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QUESTION: 7. The definition of ___________ is any conscious action or inaction to minimize, at
the optimal cost, the probability, frequency, severity, or unpredictability of loss.
Risk Administration
Risk Control
Risk Analysis
Risk Financing - ANSWER-Risk Control
QUESTION: 8. You want to use a risk identification method that helps you examine values
subject to loss and fiscal impacts after a loss. Which method would you use?
Physical inspections
Loss data analysis
Experts
Financial statement analysis - ANSWER-Financial statement analysis
QUESTION: 9. The benefits of this risk identification method include standardization, easy data
classification and tabulation, and because little training is required, utilization by non-risk
management personnel. Which risk identification method does this describe?
4
CISR Elements of Risk Management ALL 400
QUESTIONS AND CORRECT ANSWERS LATEST
UPDATE THIS YEAR
QUESTION: 1. A company outsources the shipping of its product so that it no longer has a
transportation exposure. This illustrates which risk control technique?
Prevention
Transfer
Reduction
Avoidance - ANSWER-Transfer
QUESTION: 2. A company stores its finished inventory in regional locations. This illustrates
which risk control technique?
Separation
Segregation
Duplication
Transfer - ANSWER-Separation
1
, Page 2 of 87
QUESTION: 3. Martha is building her risk management team. She is looking for a team member
who can help her calculate development factors. This duty would be performed by which of the
following team members?
Accountant
Agent or broker
Actuary
RMIS provider - ANSWER-Actuary
QUESTION: 4. The four logical classifications of exposures are used during the __________ step
of the risk management process.
Identification
Analysis
Administration
Control - ANSWER-Identification
2
, Page 3 of 87
QUESTION: 5. Nicholas believes that the risk control program he has implemented will greatly
reduce the frequency and severity of losses at his company. He now wants to choose an
insurance plan that will be the most cost-effective, taking into consideration the lower
frequency and severity of losses, while maintaining some carrier services. Which plan would he
choose?
Deductible Plan
Dividend Plan
Guaranteed Cost Plan
Self-Insurance - ANSWER-Deductible Plan
QUESTION: 6. Which one of the following does not demonstrate a purpose of quantitative
analysis?
Using loss data to determine what caused the "back strain" losses.
Using loss data to assist in forecasting next year's slip-and-fall losses.
You use loss data to decide which risks should be transferred to the insurance company.
Using loss data to determine which improvement projects to fund. - ANSWER-Using loss data to
determine what caused the "back strain" losses.
3
, Page 4 of 87
QUESTION: 7. The definition of ___________ is any conscious action or inaction to minimize, at
the optimal cost, the probability, frequency, severity, or unpredictability of loss.
Risk Administration
Risk Control
Risk Analysis
Risk Financing - ANSWER-Risk Control
QUESTION: 8. You want to use a risk identification method that helps you examine values
subject to loss and fiscal impacts after a loss. Which method would you use?
Physical inspections
Loss data analysis
Experts
Financial statement analysis - ANSWER-Financial statement analysis
QUESTION: 9. The benefits of this risk identification method include standardization, easy data
classification and tabulation, and because little training is required, utilization by non-risk
management personnel. Which risk identification method does this describe?
4
