IC86 - Risk Management Exam - 7

Find More Mock Tests Here


Q 1. As per the Insurative Model, the correct formula for calculating the Total average cost of capital (TACC) is ________.

[Cost of Debt x Debt value/firm value] x [Cost of Equity x Equity value / Firm value] + [Cost of insurance x Insurance value / firm value]

[Cost of Debt x Debt value/firm value] / [Cost of Equity x Equity value / Firm value] + [Cost of insurance x Insurance value / firm value]

[Cost of Debt x Debt value/firm value] + [Cost of Equity x Equity value / Firm value] x [Cost of insurance x Insurance value / firm value]

[Cost of Debt x Debt value/firm value] x [Cost of Equity x Equity value / Firm value] - [Cost of insurance x Insurance value / firm value]

[Cost of Debt x Debt value/firm value] + [Cost of Equity x Equity value / Firm value] + [Cost of insurance x Insurance value / firm value]
 
Q 2. In Catastrophic Risk Management, the process of determining the impact on the firm of imagined extreme adverse financial, reputational, regulatory etc. situations is known as ______.

Catastrophic Risk Transfer

Active Catastrophic Risk Management

Trend Analysis

Contingency Planning

Stress Testing
 
Q 3. This risk management team of Morgan Ltd. wants to limit the effect of losses due to a fire in their godown by recovering the maximum salvage value of its inventory. Which phase of an event under a risk management programme is this?

Pre Event phase

Post Event phase

Reporting Phase

Start-Up Phase

During Event Phase
 
Q 4. Which perils do not involve human intervention?

Economic perils

Social perils

Natural perils

Human perils

Financial perils
 
Q 5. Identify the activities which are conducted at the risk analysis stage. 1. Risk identification 2. Risk evaluation 3. Risk elimination

Only 1

Only 3

Both 1 and 2

Both 2 and 3

All 1, 2 and 3
 
Q 6. Risk associated with 'Chance of gain as well as loss' can be classified as which of the following types of risk?

Fundamental Risk

Speculative Risk

Static Risk

Liability Risk

Market Risk
 
Q 7. When is the capital made available in the case of insurance securitization ? 1. The capital is made available up-front before the loss event and is utilised in the loss 2. The capital is made available before the loss event but is utilized to make g

Only 1

Only 2

Only 3

Both 2 and 3

Both 1 and 3
 
Q 8. ________ are the documents that are legally enforceable arrangements that meet the basic test of offer and acceptance, consideration, legality of purpose and legal capacity of the parties.

Assurance

Decree

Agreements

Contracts

Commitments
 
Q 9. Identify the risk 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 behaviour and New Technology

Static Risk

Speculative risk

Social risk

Liability risk

Pure Risk
 
Q 10. The identification, evaluation, control and prevention, and transfer of risk' is the definition of _______.

Risk Control

Financial Management

Organisational Management

Risk Management

Organisational Audit
 
Q 11. Which of the following is the cost of replacing the existing property exactly at the current price?

Market value

Depreciated value

New replacement cost

Reproduction cost

Original cost
 
Q 12. As per the RISK MATRIX, what should be the course of action if there is a LOW likelihood of occurrence of a risk but it involves a HIGH cost of damage? 1. Control the risk 2. Plan contingency 3. Reduce the risk

Both 1 and 2

Both 2 and 3

Only 1

Only 2

Only 3
 
Q 13. In his book, "Risk, Uncertainty and Profit", Prof. Frank Knight has mentioned that for events where analysis is impossible because they are either an? One-off? Event or because their occurrence does not follow an apparent

Uncertainties

Holocaust

Dangers

Risks

Exposures
 
Q 14. To interpret the flow chart in terms of potential risks at different stages of the flow is the duty of -

The Managing Director

The Management

The Risk Manager

The Chief Auditor

The Insurance Agent
 
Q 15. Which programmes provide additional sources of risk financing in case of natural catastrophes and mitigate the impact of such catastrophes on insurers' capital?

Finite risk

Infinite risk

Captives

Self-insurance

Contingent capital



Find More Mock Tests Here