CISR - Elements of Risk Management Exam
Questions and Answers
A ____ is a cause of loss - -peril
-A situation, behavior, or condition that may lead to adverse financial consequences - -
exposure
-A cyberattack is an example of a ____ - -peril
-An Insured who shows no regard for his insured property demonstrates a - -morale
hazard
-A spill on a supermarket aisle is an example of a ____ because it increases the likelihood
that someone will fall - -hazard
-A passenger enters an elevator. His clothing is caught in the elevator door as the door
closes. The passenger snatches the clothing from the door before the elevator begins to
move. He is uninjured and his clothes are not damaged. - -incident
-A mixing paddle on a faulty bakery mixer snaps and strikes an employee's hand. The
employee's hand is cut and bleeding - -accident
-A driver is at fault in a minor auto accident. The other driver is uninjured, but the bumper
on her car requires repairs. The other driver demands that the at-fault driver's insurance
company pay for the loss. - -claim
-The total dollar amount of all losses for a given period of time - -severity
-A loss has occurred but is unlikely to occur again in the future - -low frequency
-An organization's tolerance for risk - -risk appetite
-The product of loss frequency multiplied by loss severity - -expected losses
-The total amount of losses in a given period divided by the total number of claims - -
average severity
-A loss expected to continue occurring regularly - -high frequency
-A cause of loss - -peril
-An unplanned event definite as to time and place that results in injury or damage to a
person or property - -accident
, -An event that disrupts normal activities and may become a loss or business interruption -
-incident
-A demand for payment or an obligation to pay as a result of a loss or occurrence - -claim
-A situation, practice, or condition that may lead to an adverse financial consequence or
loss; an activity or resource; people or assets - -exposure
-A reduction in value - -loss
-An accident with the limitation of time removed; an "accident" extended over a period of
time rather than a single, observable event - -occurrence
-A condition or characteristic that may create or increase the likelihood or severity of a
loss - -hazard
-A response to a focus on the frequency with which events occur - -Prevention
-The isolation of an exposure from other exposures, perils, or hazards - -Segregation
-Creating asset back-ups - -Duplication
-A response to a focus on the severity of incidents in an effort to recognize risk and take
action to lower losses - -Reduction
-The shift of function, exposure, or responsibility of certain liabilities to another party - -
Transfer
-The elimination of risk - -Avoidance
-The process of spreading exposures or activities over several locations - -Separation
-Risk is defined as a condition of either positive or negative ____ arising from a given set of
circumstances - -uncertainty
-Perceptions of risk depend upon an individual's job function or area of expertise. - -True
-A risk manager may define risk as the person or property exposed to a potential loss - -
True
-Pure risks include threats to property and people, as well as ___ - -Liability
-The result of a pure risk is some _____ - -Measure of Loss
-Unlike pure risk, _____ presents the opportunity for gain - -Speculative Risk
Questions and Answers
A ____ is a cause of loss - -peril
-A situation, behavior, or condition that may lead to adverse financial consequences - -
exposure
-A cyberattack is an example of a ____ - -peril
-An Insured who shows no regard for his insured property demonstrates a - -morale
hazard
-A spill on a supermarket aisle is an example of a ____ because it increases the likelihood
that someone will fall - -hazard
-A passenger enters an elevator. His clothing is caught in the elevator door as the door
closes. The passenger snatches the clothing from the door before the elevator begins to
move. He is uninjured and his clothes are not damaged. - -incident
-A mixing paddle on a faulty bakery mixer snaps and strikes an employee's hand. The
employee's hand is cut and bleeding - -accident
-A driver is at fault in a minor auto accident. The other driver is uninjured, but the bumper
on her car requires repairs. The other driver demands that the at-fault driver's insurance
company pay for the loss. - -claim
-The total dollar amount of all losses for a given period of time - -severity
-A loss has occurred but is unlikely to occur again in the future - -low frequency
-An organization's tolerance for risk - -risk appetite
-The product of loss frequency multiplied by loss severity - -expected losses
-The total amount of losses in a given period divided by the total number of claims - -
average severity
-A loss expected to continue occurring regularly - -high frequency
-A cause of loss - -peril
-An unplanned event definite as to time and place that results in injury or damage to a
person or property - -accident
, -An event that disrupts normal activities and may become a loss or business interruption -
-incident
-A demand for payment or an obligation to pay as a result of a loss or occurrence - -claim
-A situation, practice, or condition that may lead to an adverse financial consequence or
loss; an activity or resource; people or assets - -exposure
-A reduction in value - -loss
-An accident with the limitation of time removed; an "accident" extended over a period of
time rather than a single, observable event - -occurrence
-A condition or characteristic that may create or increase the likelihood or severity of a
loss - -hazard
-A response to a focus on the frequency with which events occur - -Prevention
-The isolation of an exposure from other exposures, perils, or hazards - -Segregation
-Creating asset back-ups - -Duplication
-A response to a focus on the severity of incidents in an effort to recognize risk and take
action to lower losses - -Reduction
-The shift of function, exposure, or responsibility of certain liabilities to another party - -
Transfer
-The elimination of risk - -Avoidance
-The process of spreading exposures or activities over several locations - -Separation
-Risk is defined as a condition of either positive or negative ____ arising from a given set of
circumstances - -uncertainty
-Perceptions of risk depend upon an individual's job function or area of expertise. - -True
-A risk manager may define risk as the person or property exposed to a potential loss - -
True
-Pure risks include threats to property and people, as well as ___ - -Liability
-The result of a pure risk is some _____ - -Measure of Loss
-Unlike pure risk, _____ presents the opportunity for gain - -Speculative Risk
