Chapter 1 Quiz

Lakukan tugas rumah & ujian kamu dengan baik sekarang menggunakan Quizwiz!

Dave owns a computer store. He stores backup media copies of confidential records off site in case there is a fire at the computer store. The risk control technique Dave is using to protect the confidential records is Select one: A. Duplication. B. Diversification. C. Separation. D. Avoidance.

A. Duplication.

Fluctuations in the value of stocks or bonds due to interest rate changes is an example of Select one: A. Financial risk. B. Strategic risk. C. Operational risk. D. Hazard risk

A. Financial risk.

The statement, "There is a five percent chance that John will be injured in an automobile accident while driving to work tomorrow," is an example of Select one: A. Quantifying risk. B. Verifying risk. C. Quantifying loss exposures. D. Indentifying hazards.

A. Quantifying risk.

Which one of the following is a main theoretical concept that explains how traditional risk management works? Select one: A. Silo approach B. Interdependency C. Correlation D. Portfolio theory

A. Silo approach

The focus of risk quadrants is different from the focus of risk classifications in general. While the classifications of risk focus on some aspect of the risk itself, the four quadrants of risk focus on Select one: A. The source of risk and who has traditionally managed it. B. The determination of whether the risk is diversifiable. C. Pure and speculative risks. D. Subjective and objective risks.

A. The source of risk and who has traditionally managed it.

Risk is a term that is regularly used and that is generally understood in context. As used in this discussion, which one of the following is one of the two elements within the definition of risk? Select one: A. Uncertainty of outcome B. Likelihood of injury or damage to property C. Probability of financial loss D. Opportunity for profit

A. Uncertainty of outcome

Insurers and risk managers can use the large volumes of data collected and organized through telematics to help improve results for which one of the following types of insurance? Select one: A. Workers compensation B. Automobile C. Property D. Health

B. Automobile

Which one of the following products has led to significant improvements in supply chain management by allowing for the immediate identification of discrepancies and interruptions as well as timely actions that can prevent or reduce losses? Select one: A. Wearable exoskeleton B. Closed-loop system C. Blockchain D. Accelerometer

B. Closed-loop system

Risk can be classified as diversifiable or nondiversifiable. Which one of the following statements is true with respect to this type of risk classification? Select one: A. Private insurance tends to concentrate on nondiversifiable risks; government insurance is often suitable for diversifiable risks. B. Diversifiable risks tend not to be correlated so they can be managed through diversification or spread of risk. C. Inflation, unemployment, and natural disasters, such as hurricanes, are examples of diversifiable risk. D. The distinction between diversifiable and nondiversifiable risks is clear; risks cannot fall under both classifications simultaneously.

B. Diversifiable risks tend not to be correlated so they can be managed through diversification or spread of risk.

Which one of the following is the first step in the risk management process? Select one: A. Analyze loss exposures B. Identify loss exposures C. Monitor results and revise the risk management program D. Examine the feasibility of risk management techniques

B. Identify loss exposures

The concept of correlation, in the context of why enterprise risk management works, Select one: A. Occurs when risks are balanced and diversified, which creates less volatility in a portfolio. B. Is the proposition that correlation increases risk while uncorrelated risks can reduce risk. C. Identifies internal and external occurrences that affect whether an organization will meet its objective. D. Occurs when the sum of individual risk effects is less than the total effect from the combination of all risks.

B. Is the proposition that correlation increases risk while uncorrelated risks can reduce risk.

As part of its risk management program, a vending company installed a new top of the line security system with an expectation of fewer thefts and Select one: A. Increased residual uncertainty. B. Less residual uncertainty. C. Increased anxiety. D. Higher expected losses.

B. Less residual uncertainty.

Risk is a term that is regularly used and that is generally understood in context. As used in this discussion, which one of the following is one of the two elements within the definition of risk? Select one: A. Uncertainty of outcome B. Likelihood of injury or damage to property C. Probability of financial loss D. Opportunity for profit

B. Likelihood of injury or damage to property

Which one of the following dimensions refers to the number of losses, such as fires, auto accidents, or liability claims, within a specific time period? Select one: A. Timing B. Loss frequency C. Total dollar losses D. Loss severity

B. Loss frequency

Hardware Store has been able to control its prices and inventory since it has no competitors. A new highway currently being constructed is going to allow increased competition for Hardware Store. According to the quadrants of risk, this risk of increased competition falls into the category of Select one: A. Operational risk. B. Strategic risk. C. Hazard risk. D. Financial risk.

B. Strategic risk.

Which one of the following is essential to an effective risk management program? Select one: A. Support from the community as a whole B. Support of the organization's senior management C. Reduced waste of resources D. Increased cost of risk

B. Support of the organization's senior management

Sean recently started a small consulting practice. Sean is the only employee of the business and the sole generator of revenue. Sean is very concerned that in the event that he becomes disabled due to an accident or disease there will be no revenue coming into the business. Which one of the following goals best identify Sean's concerns? Select one: A. Economy of risk management operations B. Tolerable uncertainty and earnings stability C. Social responsibility and earnings stability D. Legality and profitability

B. Tolerable uncertainty and earnings stability

The use of data gleaned from sensors to react immediately to hazardous situations is known as Select one: A. Forward-thinking risk management. B. Looking-backward risk management. C. Real-time risk management. D. Root cause risk management.

C. Real-time risk management.

The two benefits of risk management affecting individuals, organizations, and society are: it preserves financial resources by reducing expected losses and it Select one: A. Improves the allocation of productive resources. B. Increases the attractiveness to investors. C. Reduces the residual uncertainty associated with risk. D. Increases productivity within the economy and improves overall standard of living.

C. Reduces the residual uncertainty associated with risk.

One of the elements of risk is uncertainty. Which one of the following best describes the uncertainty that risk involves? Select one: A. Uncertainty as to how to manage potential losses B. Uncertainty as to whether a negative outcome is possible C. Uncertainty as to the type and timing of an outcome D. Uncertainty as to whether insurance is available

C. Uncertainty as to the type and timing of an outcome

Which one of the following is a virtual ledger of data that has been verified, timestamped, encrypted, and protected against tampering? Select one: A. Closed-loop system B. The Internet of Things C. Artificial intelligence D. Blockchain

D. Blockchain

Conrad Sales Company's vehicles are equipped with a device that allows them to locate each vehicle for tracking purposes. If a vehicle is stolen, the tracking devices can be used to recover the vehicle more quickly. Conrad Sales Company is using the risk management technique of Select one: A. Duplication. B. Loss prevention. C. Transfer. D. Loss reduction.

D. Loss reduction.

Risk management programs should Select one: A. Be an autonomous part of the organization. B. Incur substantial costs for slight benefits. C. Not use benchmarking to compare costs. D. Operate economically and efficiently.

D. Operate economically and efficiently.

Which one of the following costs is part of the overall financial consequences of risk? Select one: A. The cost of losses reimbursed by insurance B. The cost of purchasing an asset C. The cost of benchmarking surveys D. The cost of the value lost due to events that caused a loss

D. The cost of the value lost due to events that caused a loss

Which one of the following is a risk financing technique? Select one: A. Diversification B. Separation C. Loss prevention D. Transfer

D. Transfer


Set pelajaran terkait

LAB FINAL Chapter 15 General and Special Senses

View Set

Chapter 4 - American Political Culture

View Set

Module 8: EAQ Hormonal Regulation

View Set

Art History Benchmark (Diego y Yo)

View Set

Quantitative Reasoning: Sequences (assignment)~ amdm

View Set

Inflammation & tissue integrity 39/39

View Set