1|Page
CPCU 500 MANAGING EVOLVING RISKS
ACTUAL EXAM PREP 2026 ALL QUESTIONS
AND CORRECT DETAILED ANSWERS
ALREADY A GRADED |NEW AND REVISED
Which one of the following is a tool that can be used by fraud
investigators to compare documents and analyze notes? - ANSWER-
Text mining
Last year, three Metro City firemen died responding to a fire at a
chemical plant, when they were overcome by toxic fumes. In response,
Metro City is purchasing advanced first responder gear. It includes
special flame retardant suits with chemical and explosive fume sensors,
air quality sensors, and heat sensors. Responders will also wear special
watches that will track a responder's pulse, respiration, and blood
pressure; and helmets that include video cameras. All of these sensors
will feed data to a computer in real-time. The computer will analyze the
data and issue threat levels and evacuation orders, if necessary. The
protective gear Metro City will purchase and the data transmission and
analysis capability illustrate the use of - ANSWER- Smart products
Precision Electronic Components manufactures circuit boards,
microchips, and other electronic products. Given the precision necessary
for their products, the manufacturing environment must be controlled.
Temperature, humidity, static electricity and other factors must be
monitored. After losing several batches of products due to human
monitoring failures and imprecise adjustments, the company moved to a
system of sensors. The sensors monitor and regulate temperature,
,2|Page
humidity, static electricity, and other factors. The sensors transmit data
to and from each other, and the manufacturing environment is
continuously adjusted to assure production is successful. The network of
sensors transmitting data and the autonomous corrective actions without
human interaction is called - ANSWER- The Internet of Things
Mutual Fund Company (MFC) offers a wide array of mutual fund
options to investors. Each mutual fund has a different fund objective and
set of investment guidelines that apply to the fund. While MFC gives
considerable freedom to its fund portfolio managers, they are required to
abide by the fund's investment guidelines. To monitor compliance, MFC
developed a computer algorithm. The computer algorithm continuously
monitors each fund's compliance with investment guidelines. If a fund
manager violates the investment guidelines, the computer immediately
notifies MFC's internal control director, and corrective action is taken.
MFC's use of the computer algorithm to monitor investment compliance
and to provide notification when corrective action is necessary illustrates
use of - ANSWER- Artificial intelligence
Data Entry Company (DEC) offers customers data entry services. A
customer can hire DEC to enter survey data to be analyzed. Many DEC
employees spend long hours entering data on a computer. DEC has
experienced neck strain and wrist pain complaints from their employees,
increasing the company's workers compensation costs. DEC investigated
the complaints of its data-entry employees. DEC adopted curved
keyboards for data entry, wrist-rests for those entering data, and uniform
chair heights and display monitor heights to reduce neck strain claims.
The science of designing work spaces based on the health concerns of
those who will operate in the work space is called - ANSWER-
Ergonomics
,3|Page
WOTF is an ex of wearable? - ANSWER- Helmets that monitor fatigue
The National Ocianic (NOA) Monitors tsunami risk. Using the tsunami
detection buyous (smart prod) illustrates - ANSWER- CAT management
WOTF data capture tools has led to an explosion of risk management
innovation by allowing smart products to transmit data? - ANSWER-
Internet of Things
The diff between risk tech & insuretech is - ANSWER- Risk tech goes
beyond insuretech by expanding its focus to making risk financing more
efficient & preventing & mitigating losses in a variety of indv.
Risk managers today differ from traditional risk managers in WOTF
ways? - ANSWER- They attempt to min threats & optimize
opportunities
In addition to metal detectors, many airports have installed a 2nd type of
scanning tech 4 checked baggage & cargo to detect explosives based on
air samples. Which sensor used for risk assemt and control? -
ANSWER- Biochemical sensors (home diagnosis tests, wearable fitness
monitors, diabetes tests)
William is a risk manager for Green Mountain Trucking. He has always
analyzed auto loss frequency and severity rates for the fleet. William
would like to collect data on vehicle speeds, braking patterns, and
, 4|Page
distance traveled and compare that with the loss history. Which one of
the following would help William capture and analyze this data? -
ANSWER- Vehicle Telematics
Southwest Interstate Railroad (SIR) is concerned about the number
derailments in recent years. It's not cost effective to use human assets to
inspect tracks, bridges, and trestles. Instead, SIR has started to use
drones. A drone can fly low over tracks and above/below bridges and
trestles. The drones record video that is transmitted to corporate
headquarters where it is simultaneously scanned for derailment hazards.
In the past six months, the drones detected a track blockage caused by a
rock slide and damage to tracks in a remote area cause by an earthquake.
SIR dispatched work crews to make the tracks once again passable, and
no derailments occurred. SIR's use of drones, video, real-term video
scanning, and computer analysis illustrates which one of the following? -
ANSWER- Preventive Analytics
WOTF is true about preventive analytics - ANSWER- Uses smart
products and data analytics to identify root loss causes and their
implicaitions.
The emerging techs applied to risk assessment and control link the
physical domain and virtual domain. Together, these domains linked by
the merging techs create a - ANSWER- Connected ecosystem
In remodeling the primary office location, Phil, who is a partner in his
family's construction business, found asbestos in the attic of the
building. He is concerned not only about the current tear-out exposure
but is also aware that asbestos may have resulted in unidentified harm.
CPCU 500 MANAGING EVOLVING RISKS
ACTUAL EXAM PREP 2026 ALL QUESTIONS
AND CORRECT DETAILED ANSWERS
ALREADY A GRADED |NEW AND REVISED
Which one of the following is a tool that can be used by fraud
investigators to compare documents and analyze notes? - ANSWER-
Text mining
Last year, three Metro City firemen died responding to a fire at a
chemical plant, when they were overcome by toxic fumes. In response,
Metro City is purchasing advanced first responder gear. It includes
special flame retardant suits with chemical and explosive fume sensors,
air quality sensors, and heat sensors. Responders will also wear special
watches that will track a responder's pulse, respiration, and blood
pressure; and helmets that include video cameras. All of these sensors
will feed data to a computer in real-time. The computer will analyze the
data and issue threat levels and evacuation orders, if necessary. The
protective gear Metro City will purchase and the data transmission and
analysis capability illustrate the use of - ANSWER- Smart products
Precision Electronic Components manufactures circuit boards,
microchips, and other electronic products. Given the precision necessary
for their products, the manufacturing environment must be controlled.
Temperature, humidity, static electricity and other factors must be
monitored. After losing several batches of products due to human
monitoring failures and imprecise adjustments, the company moved to a
system of sensors. The sensors monitor and regulate temperature,
,2|Page
humidity, static electricity, and other factors. The sensors transmit data
to and from each other, and the manufacturing environment is
continuously adjusted to assure production is successful. The network of
sensors transmitting data and the autonomous corrective actions without
human interaction is called - ANSWER- The Internet of Things
Mutual Fund Company (MFC) offers a wide array of mutual fund
options to investors. Each mutual fund has a different fund objective and
set of investment guidelines that apply to the fund. While MFC gives
considerable freedom to its fund portfolio managers, they are required to
abide by the fund's investment guidelines. To monitor compliance, MFC
developed a computer algorithm. The computer algorithm continuously
monitors each fund's compliance with investment guidelines. If a fund
manager violates the investment guidelines, the computer immediately
notifies MFC's internal control director, and corrective action is taken.
MFC's use of the computer algorithm to monitor investment compliance
and to provide notification when corrective action is necessary illustrates
use of - ANSWER- Artificial intelligence
Data Entry Company (DEC) offers customers data entry services. A
customer can hire DEC to enter survey data to be analyzed. Many DEC
employees spend long hours entering data on a computer. DEC has
experienced neck strain and wrist pain complaints from their employees,
increasing the company's workers compensation costs. DEC investigated
the complaints of its data-entry employees. DEC adopted curved
keyboards for data entry, wrist-rests for those entering data, and uniform
chair heights and display monitor heights to reduce neck strain claims.
The science of designing work spaces based on the health concerns of
those who will operate in the work space is called - ANSWER-
Ergonomics
,3|Page
WOTF is an ex of wearable? - ANSWER- Helmets that monitor fatigue
The National Ocianic (NOA) Monitors tsunami risk. Using the tsunami
detection buyous (smart prod) illustrates - ANSWER- CAT management
WOTF data capture tools has led to an explosion of risk management
innovation by allowing smart products to transmit data? - ANSWER-
Internet of Things
The diff between risk tech & insuretech is - ANSWER- Risk tech goes
beyond insuretech by expanding its focus to making risk financing more
efficient & preventing & mitigating losses in a variety of indv.
Risk managers today differ from traditional risk managers in WOTF
ways? - ANSWER- They attempt to min threats & optimize
opportunities
In addition to metal detectors, many airports have installed a 2nd type of
scanning tech 4 checked baggage & cargo to detect explosives based on
air samples. Which sensor used for risk assemt and control? -
ANSWER- Biochemical sensors (home diagnosis tests, wearable fitness
monitors, diabetes tests)
William is a risk manager for Green Mountain Trucking. He has always
analyzed auto loss frequency and severity rates for the fleet. William
would like to collect data on vehicle speeds, braking patterns, and
, 4|Page
distance traveled and compare that with the loss history. Which one of
the following would help William capture and analyze this data? -
ANSWER- Vehicle Telematics
Southwest Interstate Railroad (SIR) is concerned about the number
derailments in recent years. It's not cost effective to use human assets to
inspect tracks, bridges, and trestles. Instead, SIR has started to use
drones. A drone can fly low over tracks and above/below bridges and
trestles. The drones record video that is transmitted to corporate
headquarters where it is simultaneously scanned for derailment hazards.
In the past six months, the drones detected a track blockage caused by a
rock slide and damage to tracks in a remote area cause by an earthquake.
SIR dispatched work crews to make the tracks once again passable, and
no derailments occurred. SIR's use of drones, video, real-term video
scanning, and computer analysis illustrates which one of the following? -
ANSWER- Preventive Analytics
WOTF is true about preventive analytics - ANSWER- Uses smart
products and data analytics to identify root loss causes and their
implicaitions.
The emerging techs applied to risk assessment and control link the
physical domain and virtual domain. Together, these domains linked by
the merging techs create a - ANSWER- Connected ecosystem
In remodeling the primary office location, Phil, who is a partner in his
family's construction business, found asbestos in the attic of the
building. He is concerned not only about the current tear-out exposure
but is also aware that asbestos may have resulted in unidentified harm.
