(CPCU 500) Chartered Property Casualty
Underwriter (CPCU®) COMPLETE EXAM LATEST
VERSION 2026-2027 QUESTIONS AND 100%
Verified ANSWERS
The development and implementation of a business continuity plan entails seven steps.
Which one of the following steps involves assessing what events may occur, when they
will occur, and how they could affect achievement of key objectives?
Select one:
A. Conducting a business impact analysis
B. Developing a continuity plan
C. Performing a risk assessment
D. Understanding the business - answer>>>A. Conducting a business impact analysis
Understanding the business is the first step in the development of a business
continuity plan. Understanding the business involves
Select one:
A. Developing an organizational strategy.
B. Determining key objectives.
,C. Distinguishing between critical and noncritical processes.
D. Identifying potential exposures. - answer>>>B. Determining key objectives.
Which one of the following types of risk assessment involves a global assessment of risks
that could affect the organization's overall business goals?
Select one:
A. Process assessment
B. Site assessment
C. Program assessment
D. Enterprise assessment - answer>>>D. Enterprise assessment
If the organization wishes to pre-fund for retained future losses, it must determine the
present value of the expected future losses. Calculating the present value of a future
amount is known as
Select one:
A. Indexing.
,B. Depreciating.
C. Compounding.
D. Discounting. - answer>>>D. Discounting.
Which one of the following is considered an advantage of the use of retention as a risk
financing technique?
Select one:
A. Less cash flow variability
B. Less exposure to large loss
C. Timing of cash flows
D. Avoiding adverse public relations - answer>>>C. Timing of cash flows
Which one of the following planned retention measures is appropriate for funding losses
with a low expected value, but becomes less advisable as the expected value of losses
gets larger?
Select one:
A. Using an unfunded reserve
, B. Using a funded reserve
C. Borrowing funds
D. Current expensing of losses - answer>>>D. Current expensing of losses
Which one of the following statements is true with regard to the selection of appropriate
risk financing measures?
Select one:
A. It is typically more economical for an organization to retain rather than transfer
loss exposures directly related to its core operations.
B. Diversifying loss exposures tends to reduce the accuracy of loss estimates, and
increases the uncertainty regarding future losses.
C. An organization that undertakes extensive risk control measures is less likely to
have the ability to fund retention of its loss exposures.
D. The higher an organization's willingness to accept risk, the higher the likelihood
that transfer will be used to cover its loss exposures. - answer>>>A. It is typically more
economical for an organization to retain rather than transfer loss exposures directly
related to its core operations.
Which one of the following statements is true regarding the risk financing goal of
maintaining an appropriate level of liquidity?
Underwriter (CPCU®) COMPLETE EXAM LATEST
VERSION 2026-2027 QUESTIONS AND 100%
Verified ANSWERS
The development and implementation of a business continuity plan entails seven steps.
Which one of the following steps involves assessing what events may occur, when they
will occur, and how they could affect achievement of key objectives?
Select one:
A. Conducting a business impact analysis
B. Developing a continuity plan
C. Performing a risk assessment
D. Understanding the business - answer>>>A. Conducting a business impact analysis
Understanding the business is the first step in the development of a business
continuity plan. Understanding the business involves
Select one:
A. Developing an organizational strategy.
B. Determining key objectives.
,C. Distinguishing between critical and noncritical processes.
D. Identifying potential exposures. - answer>>>B. Determining key objectives.
Which one of the following types of risk assessment involves a global assessment of risks
that could affect the organization's overall business goals?
Select one:
A. Process assessment
B. Site assessment
C. Program assessment
D. Enterprise assessment - answer>>>D. Enterprise assessment
If the organization wishes to pre-fund for retained future losses, it must determine the
present value of the expected future losses. Calculating the present value of a future
amount is known as
Select one:
A. Indexing.
,B. Depreciating.
C. Compounding.
D. Discounting. - answer>>>D. Discounting.
Which one of the following is considered an advantage of the use of retention as a risk
financing technique?
Select one:
A. Less cash flow variability
B. Less exposure to large loss
C. Timing of cash flows
D. Avoiding adverse public relations - answer>>>C. Timing of cash flows
Which one of the following planned retention measures is appropriate for funding losses
with a low expected value, but becomes less advisable as the expected value of losses
gets larger?
Select one:
A. Using an unfunded reserve
, B. Using a funded reserve
C. Borrowing funds
D. Current expensing of losses - answer>>>D. Current expensing of losses
Which one of the following statements is true with regard to the selection of appropriate
risk financing measures?
Select one:
A. It is typically more economical for an organization to retain rather than transfer
loss exposures directly related to its core operations.
B. Diversifying loss exposures tends to reduce the accuracy of loss estimates, and
increases the uncertainty regarding future losses.
C. An organization that undertakes extensive risk control measures is less likely to
have the ability to fund retention of its loss exposures.
D. The higher an organization's willingness to accept risk, the higher the likelihood
that transfer will be used to cover its loss exposures. - answer>>>A. It is typically more
economical for an organization to retain rather than transfer loss exposures directly
related to its core operations.
Which one of the following statements is true regarding the risk financing goal of
maintaining an appropriate level of liquidity?
