RMIN 2005 - Exam 1 (PowerPoints and
CAT) questions and answers
A conscious decision not to expose oneself or one's firm to a particular risk of loss is... - correct
answer ✔✔risk avoidance
Which domino does Heinrich's Domino Theory suggest is the most important to focus on in
reducing the frequency of workplace injuries ? - correct answer ✔✔Unsafe act or physical
hazard
It is usually easier to estimate the potential costs associated with a loss control project than the
potential benefits. (True/False) - correct answer ✔✔True
The TWO necessary elements of self-insurance are... - correct answer ✔✔A - A group of
exposure units large enough to ensure accurate loss prediction.
B - The expected losses must be prefunded through a fund especially designed for that purpose.
Storing your inventory in two different locations is an example of... - correct answer
✔✔separation
Making two copies of keys is an example of... - correct answer ✔✔duplication
What is the title for a new senior executive role some organizations created to oversee
enterprise risk management? - correct answer ✔✔Chief risk officer
The concept of enterprise risk management suggests that diversification has little relevance to
risk management. (True/False) - correct answer ✔✔False
, What type of surety bond guarantees work will be completed according to specifications? -
correct answer ✔✔Performance bond
[This Risk Identification Method] can help a business identify typical items of property and
activities for a specific industry - correct answer ✔✔Loss exposure checklist
[This Risk Identification Method] can help identify property values and sources of cash - correct
answer ✔✔Financial Statement Analysis
[This Risk Identification Method] can help identify potential bottlenecks. - correct answer
✔✔Flow chart analysis
[This Risk Identification Method] can identify who is liable when a loss occurs - correct answer
✔✔Contract analysis
[This Risk Identification Method] can be used with an RMIS to analyze losses - correct answer
✔✔Statistical analysis
A weakness of [This Risk Identification Method] is: the book values may be different from the
replacement cost - correct answer ✔✔Financial statement analysis
A weakness of [This Risk Identification Method] is: just because a loss has not happened before
doesn't mean it won't happen - correct answer ✔✔Statistical analysis of past losses
A weakness of [This Risk Identification Method] is: People have a tendency to slow down when
they are being watched - correct answer ✔✔on-site inspections
CAT) questions and answers
A conscious decision not to expose oneself or one's firm to a particular risk of loss is... - correct
answer ✔✔risk avoidance
Which domino does Heinrich's Domino Theory suggest is the most important to focus on in
reducing the frequency of workplace injuries ? - correct answer ✔✔Unsafe act or physical
hazard
It is usually easier to estimate the potential costs associated with a loss control project than the
potential benefits. (True/False) - correct answer ✔✔True
The TWO necessary elements of self-insurance are... - correct answer ✔✔A - A group of
exposure units large enough to ensure accurate loss prediction.
B - The expected losses must be prefunded through a fund especially designed for that purpose.
Storing your inventory in two different locations is an example of... - correct answer
✔✔separation
Making two copies of keys is an example of... - correct answer ✔✔duplication
What is the title for a new senior executive role some organizations created to oversee
enterprise risk management? - correct answer ✔✔Chief risk officer
The concept of enterprise risk management suggests that diversification has little relevance to
risk management. (True/False) - correct answer ✔✔False
, What type of surety bond guarantees work will be completed according to specifications? -
correct answer ✔✔Performance bond
[This Risk Identification Method] can help a business identify typical items of property and
activities for a specific industry - correct answer ✔✔Loss exposure checklist
[This Risk Identification Method] can help identify property values and sources of cash - correct
answer ✔✔Financial Statement Analysis
[This Risk Identification Method] can help identify potential bottlenecks. - correct answer
✔✔Flow chart analysis
[This Risk Identification Method] can identify who is liable when a loss occurs - correct answer
✔✔Contract analysis
[This Risk Identification Method] can be used with an RMIS to analyze losses - correct answer
✔✔Statistical analysis
A weakness of [This Risk Identification Method] is: the book values may be different from the
replacement cost - correct answer ✔✔Financial statement analysis
A weakness of [This Risk Identification Method] is: just because a loss has not happened before
doesn't mean it won't happen - correct answer ✔✔Statistical analysis of past losses
A weakness of [This Risk Identification Method] is: People have a tendency to slow down when
they are being watched - correct answer ✔✔on-site inspections
