CPCU 500 Exam | Questions with 100% Correct
Answers | Verified | Latest Update 2026/2027
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A corporate entity separated into cells so that each participating company
owns an entire cell but only a portion of the overall company
Choose an answer
1 Pure risk 2 Protected cell company
3 Hazard 4 objective risk
Don't know?
Terms in this set (107)
, Pure risk A chance of loss or no loss, but no chance of gain
ex: chance your house burns down
Speculative risk a chance of loss, no loss, or gain
ex: purchasing a stock
credit risk risk that customers or other creditors will fail to
make promised payments as they come due
subjective risk the perceived amount of risk based on an
individuals or organizations opinion
objective risk the measurable variation in uncertain outcomes
based on facts and data
diversifiable risk a risk that affects only some individuals, businesses,
or small groups. They are not highly correlated and
can be managed through diversification.
Ex: diversified stock portfolio
non diversifiable risk a risk that affects a large segment of society at the
same time
ex: inflation, unemployment, natural disasters
systemic risk the potential for a major disruption in the function
of an entire market or financial system
ex: housing crisis 2008
Answers | Verified | Latest Update 2026/2027
Save
Practice questions for this set
Learn 1 /7 Study using Learn
A corporate entity separated into cells so that each participating company
owns an entire cell but only a portion of the overall company
Choose an answer
1 Pure risk 2 Protected cell company
3 Hazard 4 objective risk
Don't know?
Terms in this set (107)
, Pure risk A chance of loss or no loss, but no chance of gain
ex: chance your house burns down
Speculative risk a chance of loss, no loss, or gain
ex: purchasing a stock
credit risk risk that customers or other creditors will fail to
make promised payments as they come due
subjective risk the perceived amount of risk based on an
individuals or organizations opinion
objective risk the measurable variation in uncertain outcomes
based on facts and data
diversifiable risk a risk that affects only some individuals, businesses,
or small groups. They are not highly correlated and
can be managed through diversification.
Ex: diversified stock portfolio
non diversifiable risk a risk that affects a large segment of society at the
same time
ex: inflation, unemployment, natural disasters
systemic risk the potential for a major disruption in the function
of an entire market or financial system
ex: housing crisis 2008
