IC86 Mock Test Sample 11
Risk management helps organizations reduce uncertainty, protect assets, and ensure business continuity. Important concepts include enterprise risk management (ERM), emergency management, risk financing, and industrial disasters. Risk exposures may relate to physical assets, human assets, legal liabilities, and financial assets. Risk assessment methods include statistical analysis, property valuation, and proactive safety measures like sprinklers, alarms, and fire doors. Insurance and finite reinsurance tools help transfer or finance risks. ERM supports shareholder value, strategic goals, and competitive advantage. Historical industrial disasters highlight the importance of safety controls and preparedness. Effective risk management improves operational stability, minimizes losses, and supports long-term organizational growth and sustainability.
1. Identify the disaster which took place in 1932 to 1968.
a) Montesso Mining Disaster (Australia)
b) Triangle Factory Fire New York (USA)
c) Seveso Dioxin Disaster (Italy)
d) Bhopal Gas Disaster (India)
2. Identify the essential elements of a risk management programme.
a) Survival and continuity of operations
b) Profitability and stability of earnings
c) Survival and continued growth
d) All of the above
3. Identify the example(s) of Prospective finite risk reinsurance covers.
a) Only 2
b) Only 3
c) Both 1 and 2
d) Both 1 and 3
4. Identify the factors taken into account while determining the total cost of risk.
a) Only 1
b) Both 2 and 3
c) Both 1 and 2
d) All 1, 2 and 3
5. Identify the features of an EMERGENCY.
a) Only 1
b) Only 2
c) Both 2 and 3
d) Both 1 and 3
6. Identify the function of a risk policy statement.
a) Only III
b) I and II
c) I and III
d) II and III
7. Identify the INCORRECT statement with regards to ERM.
a) ERM is meant to apply merely to insurance companies / financial institutions
b) ERM is intended to become an integral part of how an organisation operates
c) ERM stresses on value creation
d) ERM's goal is seeking an appropriate risk-return position
8. Identify the industrial disasters which took place during the year 1932 to 1968.
a) Bhopal Gas Tragedy (India)
b) Port Chicago Disaster (USA)
c) Seveso Dioxin Disaster (Italy)
d) Triangle Factory Fire New York (USA)
9. Identify the insurance based risk financing tools.
a) Only 1
b) Only 2
c) Only 3
d) Both 2 and 3
10. Identify the kind of risk attitude of Ms. Bharti.
a) Only I
b) Only II
c) Only III
d) II and III
11. Identify the kind of risk involved in “Loss due to burglary”.
a) I and II
b) Only I
c) Only II
d) Only III
12. Identify the main types of risk exposures.
a) Only 4
b) Both 1 and 3
c) Both 2 and 4
d) All 1, 2, 3 and 4
13. Identify the major limitations of the statistical method of risk assessment.
a) Only 1
b) Only 3
c) Only 1 and 2
d) Only 2 and 3
14. Identify the major limitations of the statistical method of risk assessment.
a) Only 1
b) Only 2
c) Only 3
d) Both 2 and 3
15. Identify the measures used to limit the extent of any loss and maximize recovery from loss.
a) Only 1 and 2
b) Only 2 and 3
c) Only 2
d) Only 1
16. Identify the method of valuing a property depending upon present value of income produced.
a) Original Cost
b) Market Value
c) Tax Appraisal Value
d) Economic Value
17. Identify the objective of the insurer behind the product liability risk control audit.
a) Assessment of new product
b) Underwriting risk evaluation
c) Review of existing product range
d) Assessment of cost against advantages
18. Identify the organizational objectives for pursuing ERM.
a) Only 2
b) Only 3
c) Both 1 and 2
d) Both 2 and 3
19. Identify the person who primarily holds responsibility for a company’s Risk Management programme.
a) Ombudsman
b) Factory Manager
c) Risk Manager
d) Auditor
20. Identify the proactive measures used to limit the extent of any loss and maximize recovery from loss.
a) Only 3
b) Only 1 and 2
c) Only 2 and 3
d) All 1, 2 and 3
