CPCU 551 Practice Questions And Correct
Detailed Answers Update Quiz's
Terms In This Set (180)
Assignment 1: ANSWER:
Customer Mary gave dry cleaner Ike
her fur coat so he could remove a c) Mary
large stain. Ike could not eliminate the
stain so he asked restoration
specialist Peter to
attempt to remove it.
The bailor in this scenario is:
a) Peter
b) Both Ike and Peter
c) Mary
d) Ike
Assignment 1: ANSWER:
A self-supporting solid wall that
prevents a fire from passing a) Fire wall
through or around it is a __________
a) Fire wall
b) Fire stop
c) Fire division
d) Hostile fire
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CPCU 551
©®
, Assignment 1: ANSWER:
If the organization wishes to pre-
fund for retained future losses, it d) Discounting
must determine the present value
of the expected future losses.
Calculating the present value of a
future amount is known as _______
a) Depreciating
b) Indexing
c) Compounding
d) Discounting
Assignment 1: ANSWER:
Which one of the following is the
primary advantage of using b) Managing the cost of risk
retention as a risk financing
measure to help an organization
meet its risk financing goals?
a) Complying with legal
requirements
b) Managing the cost of risk
c) Paying for losses
d) Managing cash flow variability
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CPCU 551
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, Assignment 1: ANSWER:
Which one of the following
statements is true with regard to a) It is typically more economical for an organization to retain rather than
the selection of appropriate risk transfer loss exposures directly related to its core operations.
financing measures?
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.
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CPCU 551
©®
, Assignment 1: ANSWER:
Captive insurers are _______
c) Sometimes used to insure property loss exposures that are difficult
a) Prohibited from underwriting to insure in the primary market.
loss exposures not directly related to
the captive's parent or affiliates.
b) Typically domiciled in the same
jurisdiction as the parent
company.
c) Sometimes used to insure
property loss exposures that are
difficult to insure in the primary
market.
d) Not permitted to transfer the
financial consequences of insured loss
exposures to other insurers.
Page | 4
CPCU 551
©®
Detailed Answers Update Quiz's
Terms In This Set (180)
Assignment 1: ANSWER:
Customer Mary gave dry cleaner Ike
her fur coat so he could remove a c) Mary
large stain. Ike could not eliminate the
stain so he asked restoration
specialist Peter to
attempt to remove it.
The bailor in this scenario is:
a) Peter
b) Both Ike and Peter
c) Mary
d) Ike
Assignment 1: ANSWER:
A self-supporting solid wall that
prevents a fire from passing a) Fire wall
through or around it is a __________
a) Fire wall
b) Fire stop
c) Fire division
d) Hostile fire
Page | 1
CPCU 551
©®
, Assignment 1: ANSWER:
If the organization wishes to pre-
fund for retained future losses, it d) Discounting
must determine the present value
of the expected future losses.
Calculating the present value of a
future amount is known as _______
a) Depreciating
b) Indexing
c) Compounding
d) Discounting
Assignment 1: ANSWER:
Which one of the following is the
primary advantage of using b) Managing the cost of risk
retention as a risk financing
measure to help an organization
meet its risk financing goals?
a) Complying with legal
requirements
b) Managing the cost of risk
c) Paying for losses
d) Managing cash flow variability
Page | 2
CPCU 551
©®
, Assignment 1: ANSWER:
Which one of the following
statements is true with regard to a) It is typically more economical for an organization to retain rather than
the selection of appropriate risk transfer loss exposures directly related to its core operations.
financing measures?
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.
Page | 3
CPCU 551
©®
, Assignment 1: ANSWER:
Captive insurers are _______
c) Sometimes used to insure property loss exposures that are difficult
a) Prohibited from underwriting to insure in the primary market.
loss exposures not directly related to
the captive's parent or affiliates.
b) Typically domiciled in the same
jurisdiction as the parent
company.
c) Sometimes used to insure
property loss exposures that are
difficult to insure in the primary
market.
d) Not permitted to transfer the
financial consequences of insured loss
exposures to other insurers.
Page | 4
CPCU 551
©®
