IC86 - Risk Management Exam - 9

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Q 1. Which kind of risk is - 'Losses due to Hurricane' ? 1. Physical Risk 2. Dynamic Risk 3. Liability Risk

Only 1

Only 2

Only 3

Both 1 and 3

Both 2 and 3

Q 2.
Below is a list of three major industrial disasters. Arrange them in a sequence starting from the first - 1. Mina Mata Mercury Disaster (Japan) 2. Bhopal Gas Tragedy (India) 3. Triangle Factory Fire - New York (USA)

3, 1 and 2

2, 1 and 3

1, 3 and 2

3, 2 and 1

1, 2 and 3

Q 3. In Mumbai, during monsoons, flooding can cause a loss. What type of risk is this? 1. Market Risk 2. Physical Risk 3. Social Risk

Only 1

Only 2

Only 3

1 and 2

1 and 3

Q 4. Under which of the following risk attitude categories is a person normally frightened by risk and does not like to live with uncertainty?

Risk Neutral

Risk Averter

Risk Challenger

Risk Preferer

Risk Manager

Q 5. Which risk identification technique has the biggest advantage of having first-hand information and avoiding reliance on reports from others?

HAZOP study

Checklists and Questionnaires

Flow Charts

Physical inspection

Study and inquiry through information and documents

Q 6. How is the probability of occurrence measured?

Only as a whole number

Only as a decimal

Only as a fraction

Only as a percentage

As a decimal or fraction or as a percentage

Q 7. Proper identification and analysis of loss exposures will depend upon which of the following factors? 1. Classification scheme for identifying all the possible exposures 2. Degree of these exposures in terms of impact on objectives 3. Employing prope

Only 1

Only 2

Both 1 and 2

Both 2 and 3

All 1, 2 and 3

Q 8. What were the changes discussed in the Basel II Accord? 1. Changes in treatment of EXPECTED losses 2. Changes in treatment of UNEXPECTED losses 3. Treatment of securitization exposures

Only 1

Only 2

Only 3

Both 1 and 2

All 1, 2 and 3

Q 9. ______ is not a component of ERM.

Event identification

Risk assessment

Monitoring

Internal environment

Corporate governance

Q 10. Identify the INCORRECT statement with regards to ERM.

ERM is meant to apply merely to insurance companies / financial institutions

ERM is intended to become an integral part of how an organization operates

ERM stresses value creation

ERM's goal is to seek an appropriate risk-return position

None of the above

Q 11. The ________ phase of a risk management program is concerned with containing the effect of any damaging or harmful incident.

Pre Event

During Event

Post Event

Subsequent phase

Reporting phase

Q 12. Which of the following are similar to multi-owner captive insurance companies or self-insurance groups?

Risk Retention Groups

Insurance Pools

Credit Securitisation

CAT bonds

Weather derivatives

Q 13. A certain risk has a high probability of occurrence and it also involves a high cost of damage. In such a scenario, what should be the ideal course of action? 1. Reduce the risk 2. Shift the risk 3. Avoid the risk

Only 1

Only 2

Only 3

Both 1 and 3

All 1,2 and 3

Q 14. Identify which of these is a Finite risk tool for mitigating risk.

Risk-retention groups

Contingent debt

Income swaps

Loss portfolio transfers

Securitization

Q 15. The purpose of loss control management is ________.

To minimize the total cost of losses

To prevent all types of losses

To transfer the risk

To pay for the losses

To try for maximum profitability of the entity



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