CPFO-Risk Management UPDATED
ACTUAL Exam Questions and CORRECT
Answers
What is Risk? - CORRECT ANSWER - The chance of loss.
What is Operational Risk? - CORRECT ANSWER - Risks encountered in the course of
delivering government services.
What is Speculative Risk? - CORRECT ANSWER - Risks associated with investments.
What is the goal of risk management? - CORRECT ANSWER - 1 to create a safe
workplace; 2 to prevent catastrophic financial loss; 3 to provide budgetary stability
What are the benefits of a risk management program? - CORRECT ANSWER - 1 allows
for more effective use of govt funds (than to buy insurance, property replacement, paying
liability claims); 2 increases worker productivity; 3 reduces uncertainties associated with future
projects.
What are the fundamental activities in a risk management program? - CORRECT
ANSWER - 1 risk identification; 2 risk evaluation; 3 risk treatment; 4 implementation
What is risk identification? - CORRECT ANSWER - Determining where there is potential
exposure to loss.
What is risk evaluation? - CORRECT ANSWER - Viewing the potential for loss on the
basis of frequency and severity of an event.
What is risk treatment? - CORRECT ANSWER - Planning and developing a risk
management program using appropriate tools and techniques, such as risk control and risk
financing.
, What is implementation of a risk program? - CORRECT ANSWER - Taking steps to
finance, begin and monitor the program.
What risks are unique to public sector? - CORRECT ANSWER - 1 police/fire are
dangerous and have potential for high loss that govt cannot control risk by discontinuing a
service; 2 broad scope of services (largest property owner); 3 lacks total control over its
environment (cannot limit access to its property)
What are the duties of the Risk Manager? - CORRECT ANSWER - 1 purchase insurance;
2 loss control; 3 administering claims; 4 monitoring litigation
What are some of the newer risks that concerns govt? - CORRECT ANSWER - 1 law
enforcement (racial profiling, video cameras); 2 employee-related (harassment, wrongful
termination); 3 technology (email, privacy, e-commerce)
What is the Alternative Market? - CORRECT ANSWER - It is risk pools or self-insurance,
methods govts had to go to when insurance became unaffordable or unavailable.
What is Enterprise Risk Management? - CORRECT ANSWER - It combines operational
and financial risk.
What are the 7 sources of risk? - CORRECT ANSWER - 1 physical environment; 2 legal ;
3 operational; 4 political; 5 social; 6 economic; 7 cognitive
Name an example of Physical Environmental Risk? - CORRECT ANSWER - Weather
events
Name an example of Legal Environmental Risk? - CORRECT ANSWER - Laws and legal
precedents
ACTUAL Exam Questions and CORRECT
Answers
What is Risk? - CORRECT ANSWER - The chance of loss.
What is Operational Risk? - CORRECT ANSWER - Risks encountered in the course of
delivering government services.
What is Speculative Risk? - CORRECT ANSWER - Risks associated with investments.
What is the goal of risk management? - CORRECT ANSWER - 1 to create a safe
workplace; 2 to prevent catastrophic financial loss; 3 to provide budgetary stability
What are the benefits of a risk management program? - CORRECT ANSWER - 1 allows
for more effective use of govt funds (than to buy insurance, property replacement, paying
liability claims); 2 increases worker productivity; 3 reduces uncertainties associated with future
projects.
What are the fundamental activities in a risk management program? - CORRECT
ANSWER - 1 risk identification; 2 risk evaluation; 3 risk treatment; 4 implementation
What is risk identification? - CORRECT ANSWER - Determining where there is potential
exposure to loss.
What is risk evaluation? - CORRECT ANSWER - Viewing the potential for loss on the
basis of frequency and severity of an event.
What is risk treatment? - CORRECT ANSWER - Planning and developing a risk
management program using appropriate tools and techniques, such as risk control and risk
financing.
, What is implementation of a risk program? - CORRECT ANSWER - Taking steps to
finance, begin and monitor the program.
What risks are unique to public sector? - CORRECT ANSWER - 1 police/fire are
dangerous and have potential for high loss that govt cannot control risk by discontinuing a
service; 2 broad scope of services (largest property owner); 3 lacks total control over its
environment (cannot limit access to its property)
What are the duties of the Risk Manager? - CORRECT ANSWER - 1 purchase insurance;
2 loss control; 3 administering claims; 4 monitoring litigation
What are some of the newer risks that concerns govt? - CORRECT ANSWER - 1 law
enforcement (racial profiling, video cameras); 2 employee-related (harassment, wrongful
termination); 3 technology (email, privacy, e-commerce)
What is the Alternative Market? - CORRECT ANSWER - It is risk pools or self-insurance,
methods govts had to go to when insurance became unaffordable or unavailable.
What is Enterprise Risk Management? - CORRECT ANSWER - It combines operational
and financial risk.
What are the 7 sources of risk? - CORRECT ANSWER - 1 physical environment; 2 legal ;
3 operational; 4 political; 5 social; 6 economic; 7 cognitive
Name an example of Physical Environmental Risk? - CORRECT ANSWER - Weather
events
Name an example of Legal Environmental Risk? - CORRECT ANSWER - Laws and legal
precedents
