CPCU 500 Exam Questions- Managing Evolving
Risks | 100% Correct Answers | Verified | Latest
2024 Version
Which one of the following statements about the use of drones is true? - ✔✔Drones may be equipped
with cameras that relay data in real-time
Which one of the following uses infrared light to detect nearby objects? - ✔✔Lidar
AMRM Insurance Company sells insurance in Virginia, North Carolina, South Carolina, and Georgia. The
company has compiled a policyowner data base that can be used to send text messages when hurricanes
approach. The company provides early warnings, storm updates from the National Weather Service, and
hurricane safety measures. The company credits the system with reduced hurricane claims. The use of
the texting system is an example of - ✔✔Preventive analytics
Clear-Rite Company specializes in the clean-up of hazardous chemical spills. Workers performing clean-
up operations must use safety suits to prevent exposure to the chemicals. The suits include pulse and
respiration monitors, body temperature sensors, and chemical sensors. The monitors and sensors report
data to a mobile operations center which is deployed to each clean-up site. The pulse and respiration
monitors and the sensors that are part of the protective gear are called - ✔✔Wearable technologies
The traditional definition of risk management reflects the traditional concept of risk as - ✔✔Negative
WOTF is true regarding the evolution of risk and risk management? - ✔✔The definition of risk has
evolved to included +/- attributes
Many auto manufacturers have automated a portion of their assembly lines by introducing a smart
product. The smart product performs repetitive tasks, such as making the same weld on each vehicle
frame as it passes the smart product. These smart products, which can be fixed or mobile, reduce
repetitive motion injuries that humans might suffer. They can also be used to perform dangerous tasks
and in heavy-lifting jobs. These smart products are called - ✔✔Robots
,Which one of the following is described as a distributed database that serves as a collectively shared
ledger? - ✔✔Blockchain
Autonomous Vehicle Applications (AVA) is a start-up company that develops safety technologies that can
be sold to companies that are producing autonomous vehicles. One technology AVA is developing allows
an autonomous vehicle to detect, extract, and analyze images; and then to respond to the images. For
example, the technology would detect a presence in a crosswalk, extract the image, and a computer
would analyze the image. When the image was determined to be a human being, the vehicle would slow
down or stop until the crosswalk was clear. This technology, which is designed to capture and analyze
images, and to act on the recognition of the image; is called - ✔✔Computer vision
Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out a need for many
organizations to evaluate and manage their - ✔✔Supply-chain risk
Which one of the following best explains how most smart products potentially improve risk
management? - ✔✔They generate big data to which advanced analytics can be applied
Take Your Order (TYO) is a company that specializes in taking product orders for vendors. The
manufacturer of a product can run a television or internet ad for a product with a toll-free number.
Customer calls for the products are routed to TYO, where one hundred operators are available to receive
the calls. Each operator is assigned a cubicle with a computer terminal, video display monitor, and a
telephone. TYO experienced high workers compensation claims from its operators, claiming neck strain,
eye strain, and wrist pain. In an effort to reduce such injuries, TYO evaluated each operator's work area.
The height of chairs and video monitors were adjusted, curved computer keyboards and wrist-rests were
provided, and the telephones were replaced with audio headsets. Workers compensation costs dropped
significantly. The science of designing work spaces based on interaction between people and the
equipment in the work s - ✔✔Ergonomics
Don is the Risk Manager for Rafferty Corporation. One of his peers, Sally, asks him one day, "How do you
define risk?" When Don replies, which one of the following statements is accurate? - ✔✔Risk has
different meanings within the risk management and insurance communities.
In an effort to reduce expenses, increase profitability, and reduce human errors; ABC Insurance Company
decided to automate most of its personal lines underwriting function. The company now uses
standardized application forms that are submitted electronically to one of the company's regional
offices. At each regional office, a computer with a scanner reads the applications. The computer has
been programmed with acceptable answers to the questions. If the answers on the application are all
,acceptable, the policy is automatically issued. Rejected applications are automatically forwarded to a
human underwriter who reviews them. The use of this technology has reduced the company's expense
ratio by two and a half percent, and reduced the time it takes to issue a policy. ABC Insurance Company's
use of computers to evaluate applications electronically is an application of - ✔✔Artificial intelligence
A municipal water plant installed water flow sensors and water pressure sensors on the water pipes
leaving the plant. The sensors make sure water is flowing properly and that there are no leaks or clogs
which could produce a loss. These types of sensors are - ✔✔Mechanical sensors
Which one of the following is a tool that can be used by fraud investigators to compare documents and
analyze notes? - ✔✔Text mining
Last year, three Metro City firemen died responding to a fire at a chemical plant, when they were
overcome by toxic fumes. In response, Metro City is purchasing advanced first responder gear. It includes
special flame retardant suits with chemical and explosive fume sensors, air quality sensors, and heat
sensors. Responders will also wear special watches that will track a responder's pulse, respiration, and
blood pressure; and helmets that include video cameras. All of these sensors will feed data to a
computer in real-time. The computer will analyze the data and issue threat levels and evacuation orders,
if necessary. The protective gear Metro City will purchase and the data transmission and analysis
capability illustrate the use of - ✔✔Smart products
Precision Electronic Components manufactures circuit boards, microchips, and other electronic products.
Given the precision necessary for their products, the manufacturing environment must be controlled.
Temperature, humidity, static electricity and other factors must be monitored. After losing several
batches of products due to human monitoring failures and imprecise adjustments, the company moved
to a system of sensors. The sensors monitor and regulate temperature, humidity, static electricity, and
other factors. The sensors transmit data to and from each other, and the manufacturing environment is
continuously adjusted to assure production is successful. The network of sensors transmitting data and
the autonomous corrective actions without human interaction is called - ✔✔The Internet of Things
Mutual Fund Company (MFC) offers a wide array of mutual fund options to investors. Each mutual fund
has a different fund objective and set of investment guidelines that apply to the fund. While MFC gives
considerable freedom to its fund portfolio managers, they are required to abide by the fund's investment
guidelines. To monitor compliance, MFC developed a computer algorithm. The computer algorithm
continuously monitors each fund's compliance with investment guidelines. If a fund manager violates
the investment guidelines, the computer immediately notifies MFC's internal control director, and
corrective action is taken. MFC's use of the computer algorithm to monitor investment compliance and
to provide notification when corrective action is necessary illustrates use of - ✔✔Artificial intelligence
, Data Entry Company (DEC) offers customers data entry services. A customer can hire DEC to enter survey
data to be analyzed. Many DEC employees spend long hours entering data on a computer. DEC has
experienced neck strain and wrist pain complaints from their employees, increasing the company's
workers compensation costs. DEC investigated the complaints of its data-entry employees. DEC adopted
curved keyboards for data entry, wrist-rests for those entering data, and uniform chair heights and
display monitor heights to reduce neck strain claims. The science of designing work spaces based on the
health concerns of those who will operate in the work space is called - ✔✔Ergonomics
WOTF is an ex of wearable? - ✔✔Helmets that monitor fatigue
The National Ocianic (NOA) Monitors tsunami risk. Using the tsunami detection buyous (smart prod)
illustrates - ✔✔CAT management
WOTF data capture tools has led to an explosion of risk management innovation by allowing smart
products to transmit data? - ✔✔Internet of Things
The diff between risk tech & insuretech is - ✔✔Risk tech goes beyond insuretech by expanding its focus
to making risk financing more efficient & preventing & mitigating losses in a variety of indv.
Risk managers today differ from traditional risk managers in WOTF ways? - ✔✔They attempt to min
threats & optimize opportunities
In addition to metal detectors, many airports have installed a 2nd type of scanning tech 4 checked
baggage & cargo to detect explosives based on air samples. Which sensor used for risk assemt and
control? - ✔✔Biochemical sensors (home diagnosis tests, wearable fitness monitors, diabetes tests)
William is a risk manager for Green Mountain Trucking. He has always analyzed auto loss frequency and
severity rates for the fleet. William would like to collect data on vehicle speeds, braking patterns, and
distance traveled and compare that with the loss history. Which one of the following would help William
capture and analyze this data? - ✔✔Vehicle Telematics
Southwest Interstate Railroad (SIR) is concerned about the number derailments in recent years. It's not
cost effective to use human assets to inspect tracks, bridges, and trestles. Instead, SIR has started to use
Risks | 100% Correct Answers | Verified | Latest
2024 Version
Which one of the following statements about the use of drones is true? - ✔✔Drones may be equipped
with cameras that relay data in real-time
Which one of the following uses infrared light to detect nearby objects? - ✔✔Lidar
AMRM Insurance Company sells insurance in Virginia, North Carolina, South Carolina, and Georgia. The
company has compiled a policyowner data base that can be used to send text messages when hurricanes
approach. The company provides early warnings, storm updates from the National Weather Service, and
hurricane safety measures. The company credits the system with reduced hurricane claims. The use of
the texting system is an example of - ✔✔Preventive analytics
Clear-Rite Company specializes in the clean-up of hazardous chemical spills. Workers performing clean-
up operations must use safety suits to prevent exposure to the chemicals. The suits include pulse and
respiration monitors, body temperature sensors, and chemical sensors. The monitors and sensors report
data to a mobile operations center which is deployed to each clean-up site. The pulse and respiration
monitors and the sensors that are part of the protective gear are called - ✔✔Wearable technologies
The traditional definition of risk management reflects the traditional concept of risk as - ✔✔Negative
WOTF is true regarding the evolution of risk and risk management? - ✔✔The definition of risk has
evolved to included +/- attributes
Many auto manufacturers have automated a portion of their assembly lines by introducing a smart
product. The smart product performs repetitive tasks, such as making the same weld on each vehicle
frame as it passes the smart product. These smart products, which can be fixed or mobile, reduce
repetitive motion injuries that humans might suffer. They can also be used to perform dangerous tasks
and in heavy-lifting jobs. These smart products are called - ✔✔Robots
,Which one of the following is described as a distributed database that serves as a collectively shared
ledger? - ✔✔Blockchain
Autonomous Vehicle Applications (AVA) is a start-up company that develops safety technologies that can
be sold to companies that are producing autonomous vehicles. One technology AVA is developing allows
an autonomous vehicle to detect, extract, and analyze images; and then to respond to the images. For
example, the technology would detect a presence in a crosswalk, extract the image, and a computer
would analyze the image. When the image was determined to be a human being, the vehicle would slow
down or stop until the crosswalk was clear. This technology, which is designed to capture and analyze
images, and to act on the recognition of the image; is called - ✔✔Computer vision
Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out a need for many
organizations to evaluate and manage their - ✔✔Supply-chain risk
Which one of the following best explains how most smart products potentially improve risk
management? - ✔✔They generate big data to which advanced analytics can be applied
Take Your Order (TYO) is a company that specializes in taking product orders for vendors. The
manufacturer of a product can run a television or internet ad for a product with a toll-free number.
Customer calls for the products are routed to TYO, where one hundred operators are available to receive
the calls. Each operator is assigned a cubicle with a computer terminal, video display monitor, and a
telephone. TYO experienced high workers compensation claims from its operators, claiming neck strain,
eye strain, and wrist pain. In an effort to reduce such injuries, TYO evaluated each operator's work area.
The height of chairs and video monitors were adjusted, curved computer keyboards and wrist-rests were
provided, and the telephones were replaced with audio headsets. Workers compensation costs dropped
significantly. The science of designing work spaces based on interaction between people and the
equipment in the work s - ✔✔Ergonomics
Don is the Risk Manager for Rafferty Corporation. One of his peers, Sally, asks him one day, "How do you
define risk?" When Don replies, which one of the following statements is accurate? - ✔✔Risk has
different meanings within the risk management and insurance communities.
In an effort to reduce expenses, increase profitability, and reduce human errors; ABC Insurance Company
decided to automate most of its personal lines underwriting function. The company now uses
standardized application forms that are submitted electronically to one of the company's regional
offices. At each regional office, a computer with a scanner reads the applications. The computer has
been programmed with acceptable answers to the questions. If the answers on the application are all
,acceptable, the policy is automatically issued. Rejected applications are automatically forwarded to a
human underwriter who reviews them. The use of this technology has reduced the company's expense
ratio by two and a half percent, and reduced the time it takes to issue a policy. ABC Insurance Company's
use of computers to evaluate applications electronically is an application of - ✔✔Artificial intelligence
A municipal water plant installed water flow sensors and water pressure sensors on the water pipes
leaving the plant. The sensors make sure water is flowing properly and that there are no leaks or clogs
which could produce a loss. These types of sensors are - ✔✔Mechanical sensors
Which one of the following is a tool that can be used by fraud investigators to compare documents and
analyze notes? - ✔✔Text mining
Last year, three Metro City firemen died responding to a fire at a chemical plant, when they were
overcome by toxic fumes. In response, Metro City is purchasing advanced first responder gear. It includes
special flame retardant suits with chemical and explosive fume sensors, air quality sensors, and heat
sensors. Responders will also wear special watches that will track a responder's pulse, respiration, and
blood pressure; and helmets that include video cameras. All of these sensors will feed data to a
computer in real-time. The computer will analyze the data and issue threat levels and evacuation orders,
if necessary. The protective gear Metro City will purchase and the data transmission and analysis
capability illustrate the use of - ✔✔Smart products
Precision Electronic Components manufactures circuit boards, microchips, and other electronic products.
Given the precision necessary for their products, the manufacturing environment must be controlled.
Temperature, humidity, static electricity and other factors must be monitored. After losing several
batches of products due to human monitoring failures and imprecise adjustments, the company moved
to a system of sensors. The sensors monitor and regulate temperature, humidity, static electricity, and
other factors. The sensors transmit data to and from each other, and the manufacturing environment is
continuously adjusted to assure production is successful. The network of sensors transmitting data and
the autonomous corrective actions without human interaction is called - ✔✔The Internet of Things
Mutual Fund Company (MFC) offers a wide array of mutual fund options to investors. Each mutual fund
has a different fund objective and set of investment guidelines that apply to the fund. While MFC gives
considerable freedom to its fund portfolio managers, they are required to abide by the fund's investment
guidelines. To monitor compliance, MFC developed a computer algorithm. The computer algorithm
continuously monitors each fund's compliance with investment guidelines. If a fund manager violates
the investment guidelines, the computer immediately notifies MFC's internal control director, and
corrective action is taken. MFC's use of the computer algorithm to monitor investment compliance and
to provide notification when corrective action is necessary illustrates use of - ✔✔Artificial intelligence
, Data Entry Company (DEC) offers customers data entry services. A customer can hire DEC to enter survey
data to be analyzed. Many DEC employees spend long hours entering data on a computer. DEC has
experienced neck strain and wrist pain complaints from their employees, increasing the company's
workers compensation costs. DEC investigated the complaints of its data-entry employees. DEC adopted
curved keyboards for data entry, wrist-rests for those entering data, and uniform chair heights and
display monitor heights to reduce neck strain claims. The science of designing work spaces based on the
health concerns of those who will operate in the work space is called - ✔✔Ergonomics
WOTF is an ex of wearable? - ✔✔Helmets that monitor fatigue
The National Ocianic (NOA) Monitors tsunami risk. Using the tsunami detection buyous (smart prod)
illustrates - ✔✔CAT management
WOTF data capture tools has led to an explosion of risk management innovation by allowing smart
products to transmit data? - ✔✔Internet of Things
The diff between risk tech & insuretech is - ✔✔Risk tech goes beyond insuretech by expanding its focus
to making risk financing more efficient & preventing & mitigating losses in a variety of indv.
Risk managers today differ from traditional risk managers in WOTF ways? - ✔✔They attempt to min
threats & optimize opportunities
In addition to metal detectors, many airports have installed a 2nd type of scanning tech 4 checked
baggage & cargo to detect explosives based on air samples. Which sensor used for risk assemt and
control? - ✔✔Biochemical sensors (home diagnosis tests, wearable fitness monitors, diabetes tests)
William is a risk manager for Green Mountain Trucking. He has always analyzed auto loss frequency and
severity rates for the fleet. William would like to collect data on vehicle speeds, braking patterns, and
distance traveled and compare that with the loss history. Which one of the following would help William
capture and analyze this data? - ✔✔Vehicle Telematics
Southwest Interstate Railroad (SIR) is concerned about the number derailments in recent years. It's not
cost effective to use human assets to inspect tracks, bridges, and trestles. Instead, SIR has started to use
