IC86 - Risk Management Exam - 2

Get More Mock Tests Here


Q 1.
When should a descriptive note on the item be made in the column provided at the end of the checklist?

Where the answer to a question is 'Y'

Where the answer to a question is 'N'

Where the answer to a question is 'NA'

Where the answer to a question is Unclear

None of the above

 
Q 3.
Following are the differences between risk management and strategic management. Identify which is the correct difference.

Risk management aims at the growth of an organization to fulfill its full productive potential.

Strategic management focuses on an organization in part and only on loss exposures.

Strategic management encompasses only pure risk.

Strategic management encompasses both pure and speculative risks with equal importance.

 
Q 4. The Insurative Model which defines the total average cost of capital is used to determine -

How the company can get working capital in a most cost-effective manner

How capital can be used to increase efficiency by giving short-term loans

How debt capital like debentures can be made more effective than equity capital

How capital can be used to increase efficiency by using all sources of capital

How working capital can be reduced to a low level to increase efficiency
 
Q 5. Which of the following is widely used as a framework and takes a top-down approach to risk management?

COSO approach

HAZOP approach

Reinsurance

Enterprise Risk Management

Insurance Management
 
Q 6. Before a risk can be managed effectively, it must be examined carefully, identified, and measured in terms of which of the following factors, so that it may be assessed in comparison with similar risks - 1. Frequency of its likely occurrence 2. Severi

Only 1

Only 2

Both 2 and 3

Both 1 and 2

All 1, 2 and 3
 
Q 7. In his book, "Risk, Uncertainty and Profit", Prof. Frank Knight has mentioned that for events where the possibility of occurrence can be calculated either on a rational basis or based on statistical analysis of several similar e

Dangers

Risks

Exposures

Uncertainties

Holocaust
 
Q 8. Under the _________ method of risk identification, the risk assessment is done by compiling a list of threats to the business.

Check Lists

Flow Charts

Study and Enquiry

HAZOP study

Threat analysis
 
Q 9. Which risk can arise from? Confiscation, expropriation, nationalization, and deprivation? of private property by governments?

Speculative Risks

Dictatorship Risks

Political Risks

Social Risks

Natural Risks
 
Q 10. _______ is an example of Retrospective finite risk reinsurance.

Adverse loss development covers

Financial quota shares

Spread Loss covers

Funding covers

Double trigger concepts
 
Q 11. Identify the objective of the insurer behind the product liability risk control audit.

Assessment of new product

Underwriting risk evaluation

Review of the existing product range

Assessment of cost against advantages

Both 1 and 4
 
Q 12. The COSO (Committee of Sponsoring Organisations) approach is a comprehensive ERM system that takes a _____ approach to risk management.

Top Down

Bottom Up

Short Term

Long Term

Strategic
 
Q 13. Which of the following is caused by chemical, mechanical, civil, electrical, or other process failure? 1. Industrial Disaster 2. Catastrophe 3. Chemical Disaster

Only 1

Only 2

Only 3

Both 1 and 2

All 1,2 and 3
 
Q 14. A taxi company - Mega Cabs Co. has made it compulsory for all their taxi drivers to take and pass a driver safety course every year. This is an example of ______.

Risk Retention

Risk Acceptance

Risk Transfer

Risk Control

Risk Avoidance
 
Q 15. If a company has an ambition of high growth then the main objective of the risk management program for such a growing company will be to _______.

control the costs

reduce the total exposure

avoid risks

protect expanding resources

transfer the loss



Get More Mock Tests Here