CPCU 500 2025/2026 Exam Questions
and Answers | A+ Score Assured
For public entities such as cities, counties and public utilities, which one of
the following is normally the most important post-loss risk management
goal?
Choose one answer.
A. Growth
B. Profitability
C. Continuity of operations
D. Earnings stability - 🧠ANSWER ✔✔C. Continuity of operations
Which one of the following is the goal of enterprise-wide risk management
(ERM)?
Choose one answer.
A. Coordinate loss reduction efforts
,B. Reduce risk management costs
C. Decentralize control of business decisions
D. Maximize the organization's value - 🧠ANSWER ✔✔D. Maximize the
organization's value
A risk management program must be monitored and periodically revised,
and that revision involves four steps. Which one of the following is one of
those four steps?
Choose one answer.
A. Establish results-based rather than activity-based standards of
acceptable performance.
B. Compare actual results with the established performance standards.
C. Reduce any performance standards that have not been achieved by the
actual results.
D. Return to the first step in the risk management process to identify new
loss exposures. - 🧠ANSWER ✔✔B. Compare actual results with the
established performance standards.
Risk can be classified as subjective or objective. Which one of the following
statements is correct with respect to these risk classifications?
,Choose one answer.
A. Subjective risk is risk associated with individuals; objective risk is risk
associated with objects or things.
B. Risk managers focus on objective risk and attempt to avoid allowing
subjective risk to affect their decisions.
C. Subjective risk can exist even where objective risk does not.
D. Individuals' subjective perception of risk in a given set of circumstances
is typically much higher than the objective risk. - 🧠ANSWER ✔✔C.
Subjective risk can exist even where objective risk does not.
JNL Construction is a general contractor. As the risk management
professional for JNL, Marie should be aware of the company's contractual
obligations, as well as the contractual obligations that others owe JNL. This
knowledge is necessary for Marie to meet which one of the following pre-
loss risk management goals?
Choose one answer.
A. Legality
B. Social responsibility
C. Tolerable uncertainty
3
COPYRIGHT©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
, D. Continuity of operations - 🧠ANSWER ✔✔A. Legality
Residual uncertainty is the level of risk that remains after organizations
implement their risk management plans. Which one of the following
statements is correct with respect to residual uncertainty?
Choose one answer.
A. Residual uncertainty is an objective measure, independent of an
organization's subjective view of the
risks to which it is exposed.
B. The cost of residual uncertainty is relatively easy to calculate and
comprises an important part of any cost of risk study.
C. Residual uncertainty can be minimized, but doing so is costly because
more has to be spent on attempts to control or finance the risks involved.
D. Cost of residual uncertainty is a factor only in the case of speculative
risk; it is not a consideration where pure risk is concerned. - 🧠ANSWER
✔✔C. Residual uncertainty can be minimized, but doing so is costly
because more has to be spent on attempts to control or finance the risks
involved.
and Answers | A+ Score Assured
For public entities such as cities, counties and public utilities, which one of
the following is normally the most important post-loss risk management
goal?
Choose one answer.
A. Growth
B. Profitability
C. Continuity of operations
D. Earnings stability - 🧠ANSWER ✔✔C. Continuity of operations
Which one of the following is the goal of enterprise-wide risk management
(ERM)?
Choose one answer.
A. Coordinate loss reduction efforts
,B. Reduce risk management costs
C. Decentralize control of business decisions
D. Maximize the organization's value - 🧠ANSWER ✔✔D. Maximize the
organization's value
A risk management program must be monitored and periodically revised,
and that revision involves four steps. Which one of the following is one of
those four steps?
Choose one answer.
A. Establish results-based rather than activity-based standards of
acceptable performance.
B. Compare actual results with the established performance standards.
C. Reduce any performance standards that have not been achieved by the
actual results.
D. Return to the first step in the risk management process to identify new
loss exposures. - 🧠ANSWER ✔✔B. Compare actual results with the
established performance standards.
Risk can be classified as subjective or objective. Which one of the following
statements is correct with respect to these risk classifications?
,Choose one answer.
A. Subjective risk is risk associated with individuals; objective risk is risk
associated with objects or things.
B. Risk managers focus on objective risk and attempt to avoid allowing
subjective risk to affect their decisions.
C. Subjective risk can exist even where objective risk does not.
D. Individuals' subjective perception of risk in a given set of circumstances
is typically much higher than the objective risk. - 🧠ANSWER ✔✔C.
Subjective risk can exist even where objective risk does not.
JNL Construction is a general contractor. As the risk management
professional for JNL, Marie should be aware of the company's contractual
obligations, as well as the contractual obligations that others owe JNL. This
knowledge is necessary for Marie to meet which one of the following pre-
loss risk management goals?
Choose one answer.
A. Legality
B. Social responsibility
C. Tolerable uncertainty
3
COPYRIGHT©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
STATEMENT. ALL RIGHTS RESERVED
, D. Continuity of operations - 🧠ANSWER ✔✔A. Legality
Residual uncertainty is the level of risk that remains after organizations
implement their risk management plans. Which one of the following
statements is correct with respect to residual uncertainty?
Choose one answer.
A. Residual uncertainty is an objective measure, independent of an
organization's subjective view of the
risks to which it is exposed.
B. The cost of residual uncertainty is relatively easy to calculate and
comprises an important part of any cost of risk study.
C. Residual uncertainty can be minimized, but doing so is costly because
more has to be spent on attempts to control or finance the risks involved.
D. Cost of residual uncertainty is a factor only in the case of speculative
risk; it is not a consideration where pure risk is concerned. - 🧠ANSWER
✔✔C. Residual uncertainty can be minimized, but doing so is costly
because more has to be spent on attempts to control or finance the risks
involved.
