Cpcu 500, Chapter 1, Questions Already Passed

Major Ways to Classify Risk {Ans: 1. Pure risk versus Speculative Risk 2. Subjective Risk versus Objective Risk 3. Diversifiable Risk versus Nondiversifiable Risk}Types of Loss Exposures {Ans: 1. Property Loss Exposure 2. Liability Loss Exposure 3. Personal Loss Exposure 4. Personnel Loss Exposure 5. Net Income Loss Exposure}Significant Differences between RM and Traditional RM {Ans: 1. Strategic application 2. Risks considered 3. Performance measurement}Major Categories of Hazards {Ans: 1. Moral Hazard 2. Attitudinal Hazard / Morale hazard 3. Physical Hazard 4. Legal Hazard.}Reasons Subjective Risk Differs From Objective Risk {Ans: 1. Familiarity 2. Control 3. Frequency and severity}Key Elements of Risk {Ans: 1. Uncertainty 2. Possibility}Pre Loss Risk Management Goals {Ans: 1. Economy of operations 2. Tolerable uncertainty 3. Legality 4. Social responsibility}Plan for meeting the continuity of operations objective {Ans: 1. Identify activities that cannot be interrupted 2. Identify accidents which can interrupt those activities 3. Determine resources needed to counter loss effects 4. Provide those resources}Financial Consequences of Risk {Ans: 1. Expected cost of losses 2. Cost of risk Management 3. Cost of residual Uncertainty}Speculative Risk Include {Ans: 1. Price Risk 2. Credit Risk 3. Inflation Risk