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CPCU 500 Exam & Practice Exam||Verified Exam!!!||
Questions and Answers Practice Questions with
Solutions Newest | Already Graded A+||Newest
Exam!!!
Hardware Store has been able to control its prices and
inventory since it has no competitors. A new highway
currently being constructed is going to allow increased
competition for Hardware Store. According to the
quadrants of risk, this risk of increased competition falls
into the category of
A. Strategic risk.
B. Hazard risk.
C. Operational risk.
D. Financial risk. - Answer-A. Strategic risk.
Company G is a manufacturer of high profile golf
equipment. The risk management professional for
Company G is concerned about loss of business related to
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product design. Failing to respond to changing customer
demand and preferences in the design of golf clubs could
cost Company G significant market share. Categorized
according to the quadrants of risk, this exposure to loss
would be classified as a(n)
A. Strategic risk.
B. Financial risk.
C. Operational risk.
D. Hazard risk. - Answer-A. Strategic risk.
George has received an inheritance and is deciding what
to do with the money. He has limited his options to four
choices: donate all the money to his favorite charity, use
the entire inheritance to buy a yacht, invest the inheritance
in a small rental property, or use the entire amount to
purchase T-bills. Which one of the following statements is
true regarding the risk involved in George's options?
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A. Donating his inheritance to charity is a pure risk; there
is no uncertainty that the money will be gone and George
will have no chance of profit.
B. Buying a boat is a nondiversifiable risk because George
can only afford to purchase a single yacht.
C. The rental property presents both pure and speculative
risk; property values may increase, and the building could
burn down.
D. Purchasing T-bills is a pure risk because the interest
rate payable is known, and the chance of loss is minimal. -
Answer-C. The rental property presents both pure and
speculative risk; property values may increase, and the
building could burn down.
Risk can be classified as pure or speculative. Which one
of the following is the best example of a speculative risk?
A. Acquiring a new television
B. Investing in shares of stock
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C. Buying a new personal vehicle
D. Purchasing an insurance policy - Answer-B. Investing in
shares of stock
In the context of risk, the chance of being injured while
driving to and from work, loading a truck at work, moving
furniture at home, or falling in an icy parking lot at the mall
are all examples of
A. Possibilities.
B. Uncertainties.
C. Probabilities.
D. Losses. - Answer-A. Possibilities.
The statement, "There is a five percent chance that John
will be injured in an automobile accident while driving to
work tomorrow," is an example of
CPCU 500 Exam & Practice Exam||Verified Exam!!!||
Questions and Answers Practice Questions with
Solutions Newest | Already Graded A+||Newest
Exam!!!
Hardware Store has been able to control its prices and
inventory since it has no competitors. A new highway
currently being constructed is going to allow increased
competition for Hardware Store. According to the
quadrants of risk, this risk of increased competition falls
into the category of
A. Strategic risk.
B. Hazard risk.
C. Operational risk.
D. Financial risk. - Answer-A. Strategic risk.
Company G is a manufacturer of high profile golf
equipment. The risk management professional for
Company G is concerned about loss of business related to
,2|Page
product design. Failing to respond to changing customer
demand and preferences in the design of golf clubs could
cost Company G significant market share. Categorized
according to the quadrants of risk, this exposure to loss
would be classified as a(n)
A. Strategic risk.
B. Financial risk.
C. Operational risk.
D. Hazard risk. - Answer-A. Strategic risk.
George has received an inheritance and is deciding what
to do with the money. He has limited his options to four
choices: donate all the money to his favorite charity, use
the entire inheritance to buy a yacht, invest the inheritance
in a small rental property, or use the entire amount to
purchase T-bills. Which one of the following statements is
true regarding the risk involved in George's options?
,3|Page
A. Donating his inheritance to charity is a pure risk; there
is no uncertainty that the money will be gone and George
will have no chance of profit.
B. Buying a boat is a nondiversifiable risk because George
can only afford to purchase a single yacht.
C. The rental property presents both pure and speculative
risk; property values may increase, and the building could
burn down.
D. Purchasing T-bills is a pure risk because the interest
rate payable is known, and the chance of loss is minimal. -
Answer-C. The rental property presents both pure and
speculative risk; property values may increase, and the
building could burn down.
Risk can be classified as pure or speculative. Which one
of the following is the best example of a speculative risk?
A. Acquiring a new television
B. Investing in shares of stock
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C. Buying a new personal vehicle
D. Purchasing an insurance policy - Answer-B. Investing in
shares of stock
In the context of risk, the chance of being injured while
driving to and from work, loading a truck at work, moving
furniture at home, or falling in an icy parking lot at the mall
are all examples of
A. Possibilities.
B. Uncertainties.
C. Probabilities.
D. Losses. - Answer-A. Possibilities.
The statement, "There is a five percent chance that John
will be injured in an automobile accident while driving to
work tomorrow," is an example of
