AS-05 (v) Actuarial Aspects of Risk Management Mock Test 12

1. According to Basic Concepts and Theories, what determines the value of our business tomorrow?

A. The marketing budget today
B. The office location today
C. The long-term investments we make today
D. The number of employees today
E. The brand colour today

2. 'Risk treatment' is defined as the process to:

A. Modify risk
B. Audit accounts
C. Price products
D. Calculate dividends
E. Recruit staff

3. A further drawback of VaR mentioned in the chapter is that it is:

A. Too simple to calculate
B. Sub-additive
C. Not sub-additive and discourages diversification
D. Unrelated to risk
E. Always negative

4. According to the 'Choose Response Strategy' step, plans are developed to do all of the following EXCEPT:

A. Accept or exploit risks
B. Eliminate all risk entirely
C. Reduce or control risks
D. Avoid risks
E. Share or insure risks

5. Which task involves monitoring risk and contingency resolution?

A. Monitor risk and contingency resolution
B. Eliminate risk reviews
C. Provide feedback of analysis
D. Develop reporting procedures
E. Increase project scope

6. What is the title of Chapter 4?

A. Operating Environment
B. Assessment of Risks
C. Risk Measures
D. Capital Management
E. Classification of Risks

7. Risk is essentially described as the standard deviation of:

A. Marketing spend
B. Employee turnover
C. Profit margins
D. Tax payments
E. Return on an asset or portfolio

8. Which approach concludes that the capital structure of an organization has a major influence on its value?

A. The Modigliani-Miller Approach
B. The Arbitrage Approach
C. The Net Operating Income Approach
D. The Pecking Order Approach
E. The Net Income Approach

9. Risk treatments that deal with negative consequences are sometimes referred to by which terms?

A. Risk attitude only
B. Risk mitigation, risk elimination, risk prevention and risk reduction
C. Risk appetite and risk tolerance
D. Risk financing only
E. Risk aggregation only

10. Risk assessment is defined as a systematic process for identifying and evaluating:

A. Only physical assets
B. Only financial transactions
C. Events that could affect the achievement of objectives
D. Only employee performance
E. Only marketing campaigns