IC86 RISK MANAGEMENT - 07
| Q1.Which programs 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 |
| Q2.Identify the advantages of the FLOWCHARTS method of risk identification. 1. This method identifies potential risks at different stages of the flow 2. This method uses a broad-based approach to risks and is not concerned with identifying the individual sources of risk 3. This method helps to understand only the financial flow aspects of an organization and the risks involved |
| Only 1 |
| Only 2 |
| Only 2 and 3 |
| Only 1 and 2 |
| All 1, 2 and 3 |
| Q3.Risk avoidance can be considered as the best risk management technique when the chance of loss is _ and the loss severity is __. |
| High, High |
| Low, Low |
| Low, High |
| High, Low |
| None of above |
| Q4.Which are the three 'P's of an organization which is affected by a loss? |
| Property, Productivity, and People |
| Profits, People, and Productivity |
| Placement, People, and Profits |
| Property, Productivity, and Profits |
| People, Property, and Profits |
| Q5.Arrange the phases of DISASTER in the correct chronological order - 1. Recovery Phase 2. Crisis Phase 3. Emergency response phase 4. Restoration phase |
| 3 - 1 - 2 - 4 |
| 2 - 1 - 4 - 3 |
| 2 - 3 - 1 - 4 |
| 4 - 3 - 1 - 2 |
| 1 - 2 - 4 - 3 |
| Q6.In accordance with COCA, which of the following are intended to convey self-imposed duties? |
| Agreements |
| Commitments |
| Obligations |
| Contracts |
| Both 2 and 3 |
| Q7.There are five steps in a Risk Management decision-making process. Which is the fifth and the last step? |
| Identifying & Analyzing loss exposure |
| Examining the feasibility of alternative risk management techniques |
| Monitoring & improving the program |
| Implementing the selected technique |
| Selecting the best technique |
| Q8.Which of these statements hold true for Insurance pool or Self-insurance groups? 1. Members contribute premiums to a fund, the proceeds of which are invested and paid out for claims 2. These are an extension of self-insurance 3. These groups tend to comprise of companies with diverse risk profiles |
| Only 1 and 3 |
| Only 1 and 2 |
| Only 2 |
| Only 3 |
| All 1, 2 and 3 |
| Q9.Finite risk insurance products are most useful where the risk sought to be insured against is a ___. |
| High severity and low-frequency event |
| Low severity event |
| High-frequency event |
| Low severity and low-frequency event |
| Low severity and high-frequency event |
| Q10.Mr. Mehra runs a hotel at a tourist place in India. Due to geographical tensions, Mr. Mehra feels that there could be a reduction in the number of tourists. He calls a meeting of his staff to discuss ways of attracting more tourists as well as reducing costs. Identify the type of this risk response? |
| Acceptance |
| Transfer |
| Reduction |
| Sharing |
| Avoidance |