CPCU 500 3RD Edition Final Practice Exam 1
Questions And Answers Verified 100% Correct
In order to avoid underestimating or overestimating loss
projections, historical loss data must be expressed in -
ANSWER -Constant dollars.
Probability analysis is best suited for organizations that have
- ANSWER -A substantial volume of data on past losses
This graph illustrates a probability distribution. The
horizontal axis illustrates possible outcomes, and the vertical
axis shows the probability of each. Which one of the
following statements is true regarding the information
presented in this graph? - ANSWER -The most frequently
occurring value is seven
To determine which one of the following measures must the
values in a data set be arranged by size? - ANSWER -Median
In using the coefficient of variation when comparing two
distributions, if both distributions have the same mean, then
the distribution with the larger standard deviation will have -
ANSWER -Greater variability.
, The normal distribution is a probability distribution that,
when graphed, generates a particular type of curve. Which
one of the following best describes that curve? - ANSWER -
Bell-shaped
In an array of 10 losses, if expected loss frequency is 4.2
when expected loss severity is $200.50, the expected total
dollar loss is - ANSWER -$842.10
$200.50 X 4.2 = $842.10; In an array of 10 losses, if expected
loss frequency is 4.2 when expected loss severity is $200.50,
the expected total dollar loss is $842.10.
Which one of the following is a risk control technique that
could be considered both a loss reduction and a loss
prevention measure? - ANSWER -Burglar alarm
Which one of the following would indicate that an
organization is using the risk control technique of
duplication to reduce loss severity? - ANSWER -An
organization makes arrangements with more than one
supplier of a key raw material,
Which one of the following focuses on the minimum building
design, construction, operation, and maintenance
requirements necessary to assure occupants of a safe exit
from the burning portion of a building? - ANSWER -Life
safety
Questions And Answers Verified 100% Correct
In order to avoid underestimating or overestimating loss
projections, historical loss data must be expressed in -
ANSWER -Constant dollars.
Probability analysis is best suited for organizations that have
- ANSWER -A substantial volume of data on past losses
This graph illustrates a probability distribution. The
horizontal axis illustrates possible outcomes, and the vertical
axis shows the probability of each. Which one of the
following statements is true regarding the information
presented in this graph? - ANSWER -The most frequently
occurring value is seven
To determine which one of the following measures must the
values in a data set be arranged by size? - ANSWER -Median
In using the coefficient of variation when comparing two
distributions, if both distributions have the same mean, then
the distribution with the larger standard deviation will have -
ANSWER -Greater variability.
, The normal distribution is a probability distribution that,
when graphed, generates a particular type of curve. Which
one of the following best describes that curve? - ANSWER -
Bell-shaped
In an array of 10 losses, if expected loss frequency is 4.2
when expected loss severity is $200.50, the expected total
dollar loss is - ANSWER -$842.10
$200.50 X 4.2 = $842.10; In an array of 10 losses, if expected
loss frequency is 4.2 when expected loss severity is $200.50,
the expected total dollar loss is $842.10.
Which one of the following is a risk control technique that
could be considered both a loss reduction and a loss
prevention measure? - ANSWER -Burglar alarm
Which one of the following would indicate that an
organization is using the risk control technique of
duplication to reduce loss severity? - ANSWER -An
organization makes arrangements with more than one
supplier of a key raw material,
Which one of the following focuses on the minimum building
design, construction, operation, and maintenance
requirements necessary to assure occupants of a safe exit
from the burning portion of a building? - ANSWER -Life
safety
