IC86 Mock Test Sample 19

Q1. While deciding objectives of a risk management programme, which of the following phases is/are aimed at eliminating the possibility of its occurrence?
a. Pre Event
b. During the Event
c. Post Event
d. Recovery Phase

Q2. While evaluating a risk, which of the following dimensions have to be considered?
a. Severity of loss
b. Cost of risk management techniques
c. Frequency of loss
d. Market performance

Q3. While prioritising risks, which type of risks should be addressed first?
a. Catastrophe Risks
b. Major Risks
c. Medium Risks
d. Minor Risks

Q4. While using loss experience statistics for risk assessment, corrections are required for which factors?
a. Inflation
b. Exposure in units
c. Change in legislation
d. Market competition

Q5. Why is stress testing applied to all divisions of a company?
a. To determine profitability under risk events
b. To determine viability under risk events
c. To determine accessibility under risk events
d. To determine liquidity under risk events

Q6. With respect to credit securitisation, which statement is correct?
a. Assets subject to credit risk are transferred to a special investment vehicle
b. Securities are issued backed by transferred assets
c. Such products are similar to insurance products
d. All of these

Q7. With respect to captive insurers, identify the correct statement.
a. Captive insurers are alternatives to insurance companies
b. Captives have advantages over traditional insurance coverage
c. Companies enjoy cash flow benefits through captives
d. All of these

Q8. With respect to HAZOP study, identify the correct statement.
a. Used extensively in the chemical industry
b. Employed at planning and design stage
c. It is a quantitative approach
d. Both a and b

Q9. Within the duties of a Risk Manager, what is essential for gathering statistical data for risk analysis?
a. Insurance accounting
b. Record keeping
c. Budgeting
d. Marketing

Q10. XYZ Insurance company invests in equities, fixed income securities, cash, and money market instruments. Which risk is being managed?
a. Financial Risk
b. Personal Risk
c. Strategic Risk
d. Social Risk

Q11. Risk management of accidental loss exposures can be viewed as part of:
a. Top management
b. Strategic management
c. Tactical management
d. Operational management

Q12. Risk management on its own is:
a. A profit center
b. A business vertical
c. Not a profit center
d. A sales function

Q13. Risk retention groups are liability insurance companies owned by their:
a. Governments
b. Insurers
c. Insureds
d. Auditors

Q14. Risks result in injury or loss due to:
a. Lack of awareness
b. Lack of motivation
c. Lack of capability
d. All of these

Q15. Which are proactive measures to limit losses and maximize recovery?
a. Installation of sprinklers
b. Construction of automatic fire doors
c. Installation of burglar alarms
d. All of these

Q16. Selection of risk control and financing techniques requires forecasting of:
a. Annual profits
b. Annual expenses
c. Frequency and severity of expected losses
d. Future taxes

Q17. Self-insurance, insurance pools, captive insurers, and risk retention groups are examples of:
a. Insurance products
b. Derivative products
c. Alternatives to insurance companies
d. Financial institutions

Q18. Some inevitable events are assigned a numerical value of:
a. Zero
b. One
c. Two
d. Ten

Q19. What precaution should workers take against poisonous dust particles?
a. Wear safety belts
b. Wear shielding clothes
c. Wear safety masks
d. Wear gloves

Q20. Arrange the following industrial disasters in chronological order:
a. Triangle Factory Fire – New York
b. Mina Mata Mercury Disaster – Japan
c. Bhopal Gas Disaster – India
d. Seveso Dioxin Disaster – Italy