1 | Page
RMIN 2005 - Exam 1 (Powerpoints and
CAT) Questions and Correct Answers
A conscious decision not to expose oneself or one's firm to a
particular risk of loss is... Ans: risk avoidance
Which domino does Heinrich's Domino Theory suggest is the most
important to focus on in reducing the frequency of workplace
injuries ? Ans: 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) Ans:
True
The TWO necessary elements of self-insurance are... Ans: 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...
Ans: separation
Making two copies of keys is an example of... Ans: duplication
What is the title for a new senior executive role some
organizations created to oversee enterprise risk management?
Ans: Chief risk officer
The concept of enterprise risk management suggests that
diversification has little relevance to risk management.
(True/False) Ans: False
What type of surety bond guarantees work will be completed
according to specifications? Ans: Performance bond
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, 2 | Page
[This Risk Identification Method] can help a business identify
typical items of property and activities for a specific industry Ans:
Loss exposure checklist
[This Risk Identification Method] can help identify property values
and sources of cash Ans: Financial Statement Analysis
[This Risk Identification Method] can help identify potential
bottlenecks. Ans: Flow chart analysis
[This Risk Identification Method] can identify who is liable when a
loss occurs Ans: Contract analysis
[This Risk Identification Method] can be used with an RMIS to
analyze losses Ans: Statistical analysis
A weakness of [This Risk Identification Method] is: the book values
may be different from the replacement cost Ans: 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 Ans:
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 Ans: on-site
inspections
A weakness of [This Risk Identification Method] is: Only identifies
who is liable in the event of a loss Ans: Contract analysis
If the likelihood of flood damage to a particular home is estimated
to be 1 in 100, it is said that the home is located in a 100-year
flood plain. What is the probability of flood damage in a given
year? (State as a straight number, not a percentage, e.g. if it is 20%,
state 0.20 Ans: 0.01
© 2025 All rights reserved
RMIN 2005 - Exam 1 (Powerpoints and
CAT) Questions and Correct Answers
A conscious decision not to expose oneself or one's firm to a
particular risk of loss is... Ans: risk avoidance
Which domino does Heinrich's Domino Theory suggest is the most
important to focus on in reducing the frequency of workplace
injuries ? Ans: 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) Ans:
True
The TWO necessary elements of self-insurance are... Ans: 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...
Ans: separation
Making two copies of keys is an example of... Ans: duplication
What is the title for a new senior executive role some
organizations created to oversee enterprise risk management?
Ans: Chief risk officer
The concept of enterprise risk management suggests that
diversification has little relevance to risk management.
(True/False) Ans: False
What type of surety bond guarantees work will be completed
according to specifications? Ans: Performance bond
© 2025 All rights reserved
, 2 | Page
[This Risk Identification Method] can help a business identify
typical items of property and activities for a specific industry Ans:
Loss exposure checklist
[This Risk Identification Method] can help identify property values
and sources of cash Ans: Financial Statement Analysis
[This Risk Identification Method] can help identify potential
bottlenecks. Ans: Flow chart analysis
[This Risk Identification Method] can identify who is liable when a
loss occurs Ans: Contract analysis
[This Risk Identification Method] can be used with an RMIS to
analyze losses Ans: Statistical analysis
A weakness of [This Risk Identification Method] is: the book values
may be different from the replacement cost Ans: 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 Ans:
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 Ans: on-site
inspections
A weakness of [This Risk Identification Method] is: Only identifies
who is liable in the event of a loss Ans: Contract analysis
If the likelihood of flood damage to a particular home is estimated
to be 1 in 100, it is said that the home is located in a 100-year
flood plain. What is the probability of flood damage in a given
year? (State as a straight number, not a percentage, e.g. if it is 20%,
state 0.20 Ans: 0.01
© 2025 All rights reserved
