IC86 - Risk Management Exam - 6

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Q 1. A possible alternative to the actual site visit is the completion of a checklist or some sort of questionnaire. Identify the limitation of this risk identification technique.

Easy to change

Feedback may not be on time

Facilitates quick comparison

Reasonably inexpensive

None of the above
 
Q 2. The combination of three basic elements ie. Values exposed to loss; Perils causing loss and Financial consequences of loss lead to _______. 1. Pure Risks 2. Loss Exposures 3. Speculative Risks

Only 1

Only 2

Only 3

Both 1 and 2

All 1,2 and 3
 
Q 3. Which of the following is a diagrammatic representation of all events which may give rise to some major event?

Fault Trees

Flow Charts

Checklists

Organisational Charts

Event Analysis
 
Q 4. An already implemented risk management program needs constant monitoring to _______. 1. Increase the profits 2. Adjust for changes 3. Ensure that it is crossing the expected results

Only 1

Only 2

Only 1 and 2

Only 2 and 3

All 1,2 and 3
 
Q 5. If there is a high likelihood of occurrence of a risk and it also involves a high cost of damage, then what should be the ideal course of action? 1. Reduce the risk 2. Shift the risk 3. Avoid the risk

Only 2 and 3

Only 1 and 2

All 1, 2 and 3

Only 2

Only 3
 
Q 6. The three steps of the Risk Management process are listed below. Arrange them in proper order from first to last. 1. Risk Treatment 2. Risk Analysis 3. Risk Financing

3,2,1

2,3,1

1,2,3

2,1,3

1,3,2
 
Q 7. Which of these losses should be looked upon as a Trade Risk? 1. Chronic Losses 2. Sporadic Losses 3. Catastrophes

Only 1

Only 2

Only 3

Both 1 and 2

All 1, 2 and 3
 
Q 8. How can the ERM team determine the accurate cost of the company's risk exposure?

By understanding individual unit risks and assessing the individual risks in aggregate

By understanding overall organizational risk

By understanding total risk and assessing the individual risks in aggregate

By assessing division-wise risk

All of the above
 
Q 9. The probability of occurrence that an event may take place is measured either as a decimal a fraction or as a percentage but always in a range. The impossible is assigned a value of Zero & inevitable is assigned a value of _____.

Ten

One Hundred

One

Fifty

Zero point one
 
Q 10. What is/are the disadvantages of the Fault Tree method of risk identification? 1. It's expensive when compared to physical inspection 2. All types of organizations cannot use it 3. Discovering the proximate cause of the risk event is not possible in th

Only 1

Only 2

Only 2 and 3

Only 3

All 1,2 and 3
 
Q 11. A situation of a financial loss to a business due to the death, disability, retirement, or resignation of key employees is known as ________.

Income loss exposures

Property loss exposures

Personnel loss exposure

Personal loss exposure

Liability exposures
 
Q 12. Identify which type of risk is this, based on the following statements - 1. In this risk, there can be either a gain or loss 2. This category of risk is concerned with the outcome of uncertain events 3. Examples of this risk are - Consumer behavior

Social risk

Liability risk

Static Risk

Pure Risk

Speculative risk
 
Q 13. The risk management technique of _________ is an example of Self Insurance.

Indemnity

Avoidance

Acceptance

Noninsurance transfer

Retention
 
Q 14. Which of these is NOT a post-loss risk management objective?

Survival

Continuity of operations

Profitability

Reduction of anxiety

Stability of earnings
 
Q 15. Due to some reason, it is impossible that Mr. P will ever get married. So as per the probability of occurrence, what value will be assigned to this event? 1. One 2. Ten 3. Zero

Only 1

Only 2

Only 3

Both 1 and 3

Both 1 and 2



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