CPCU 500 Exam Questions and Answers 100%
Verified
Question:
Pure risk
Answer:
A chance of loss or no loss, but no chance of gain ex: chance your house burns down
Question:
Speculative risk
Answer:
a chance of loss, no loss, or gain ex: purchasing a stock
Question:
credit risk
Answer:
risk that customers or other creditors will fail to make promised payments as they come due
Question:
subjective risk
Answer:
the perceived amount of risk based on an individuals or organizations opinion
,Question:
objective risk
Answer:
the measurable variation in uncertain outcomes based on facts and data
Question:
diversifiable risk
Answer:
a risk that affects only some individuals, businesses, or small groups. They are not highly
correlated and can be managed through diversification. Ex: diversified stock portfolio
Question:
non diversifiable risk
Answer:
a risk that affects a large segment of society at the same time ex: inflation, unemployment,
natural disasters
Question:
systemic risk
Answer:
the potential for a major disruption in the function of an entire market or financial system ex:
housing crisis 2008
, Question:
Market risk
Answer:
uncertainty about an investment's future value because of potential changes in the market for
that type of investment
Question:
Liquidity risk
Answer:
the risk that an asset cannot be sold on short notice without incurring a loss
Question:
Enterprise risk management
Answer:
an approach to managing all of an organizations key business risks and opportunities with
the intent of maximizing shareholder value. Manages all risks including operational, financial,
and strategic
Question:
Loss exposure
Answer:
any condition or situation that presents a possibility of loss. Has 3 elements - an asset
exposed to loss, cause of loss, financial consequences of that loss.
Verified
Question:
Pure risk
Answer:
A chance of loss or no loss, but no chance of gain ex: chance your house burns down
Question:
Speculative risk
Answer:
a chance of loss, no loss, or gain ex: purchasing a stock
Question:
credit risk
Answer:
risk that customers or other creditors will fail to make promised payments as they come due
Question:
subjective risk
Answer:
the perceived amount of risk based on an individuals or organizations opinion
,Question:
objective risk
Answer:
the measurable variation in uncertain outcomes based on facts and data
Question:
diversifiable risk
Answer:
a risk that affects only some individuals, businesses, or small groups. They are not highly
correlated and can be managed through diversification. Ex: diversified stock portfolio
Question:
non diversifiable risk
Answer:
a risk that affects a large segment of society at the same time ex: inflation, unemployment,
natural disasters
Question:
systemic risk
Answer:
the potential for a major disruption in the function of an entire market or financial system ex:
housing crisis 2008
, Question:
Market risk
Answer:
uncertainty about an investment's future value because of potential changes in the market for
that type of investment
Question:
Liquidity risk
Answer:
the risk that an asset cannot be sold on short notice without incurring a loss
Question:
Enterprise risk management
Answer:
an approach to managing all of an organizations key business risks and opportunities with
the intent of maximizing shareholder value. Manages all risks including operational, financial,
and strategic
Question:
Loss exposure
Answer:
any condition or situation that presents a possibility of loss. Has 3 elements - an asset
exposed to loss, cause of loss, financial consequences of that loss.
