IC86 Mock Test Sample 7
These questions cover key concepts of Risk Management, Enterprise Risk Management (ERM), insurance, business continuity planning, and risk control techniques. Topics include speculative and pure risks, catastrophic risk management, COSO framework, finite risk reinsurance, insurance pools, risk retention groups, property and liability risks, strategic management, and risk financing. The questions also explain methods of handling risks such as transfer, reduction, avoidance, and acceptance. Important areas like physical asset exposure, contingency planning, stress testing, and organizational risk objectives are highlighted. The set helps in understanding how businesses identify, evaluate, control, and finance risks to ensure operational stability and long-term sustainability.
1. Identify the procedure explained in below example?
After any serious problem situation, whether it results in a loss or if the loss is forestalled by the ERM process, the firm uses the situation as a learning opportunity.
a. Trend analysis
b. Stress testing
c. Contingency planning
d. Problem post mortem
2. Identify the process which involves trend analysis, stress testing, contingency planning and catastrophic risk transfer.
a. Risk management culture
b. Damage risk management advantage
c. Strategic risk management
d. Catastrophic risk management
3. Identify the products which give the advantage of risk transfer and risk financing.
a. Only II
b. Only I
c. Only III
d. I and II
4. Identify the purpose of the COSO approach.
a. To make sure that an organisation has good liquidity
b. To suggest a comprehensive risk management system
c. To regulate portfolio management
d. Only 1 and 2
5. Identify the risk based on the following statements.
a. Static Risk
b. Speculative risk
c. Social risk
d. Liability risk
6. Identify the risk involved in the given example regarding increase in tax payable due to new cess.
a. Only I
b. Only II
c. Only III
d. I and II
7. Identify the risk which can cause direct damage or harm.
a. Only 3
b. Both 1 and 2
c. Both 2 and 3
d. Both 1 and 3
8. Identify the statements which are NOT correct with respect to Risk Retention Groups.
a. Only 1
b. Only 3
c. Both 1 and 2
d. Both 2 and 3
9. Identify the statements which are true about Fundamental Risks.
a. Both 1 and 2
b. Both 2 and 3
c. Only 2
d. All 1, 2 and 3
10. Identify the strategic objectives of ERM.
a. 1,3 and 4
b. 2,3 and 4
c. 2 and 3
d. 1,2 and 4
11. Identify the true statement about strategic management.
a. Only 1
b. Only 3
c. Both 1 and 2
d. Both 1 and 3
12. Identify the true statements with respect to Insurance pool or Self-insurance groups.
a. Only 1
b. Only 2
c. Only 3
d. Only 2 and 3
13. Identify the type of business risk – An office catches fire and causes damage.
a. Only 1
b. Only 2
c. Only 3
d. 1 and 2
14. Identify the type of risk exposure in which the exposure is to motor vehicles, buildings, furniture and computers.
a. Financial Assets Exposure
b. Legal Assets Exposure
c. Human Assets Exposure
d. Physical Assets Exposure
15. Identify what finite risk reinsurance products combine.
a. Risk financing and risk mitigation
b. Risk identifying and risk transfer
c. Risk identifying and risk mitigation
d. Risk financing and risk transfer
16. Identify what involves examining the future and drawing up the plan of action.
a. Only 2
b. Only 1
c. Only 3
d. Both 1 and 2
17. Identify which is NOT a component of ERM.
a. Internal environment
b. Corporate governance
c. Control Activities
d. Risk assessment
18. Identify which is NOT an example of Funded Traditional Contingent Capital tool.
a. Income / Asset swaps
b. Banking products
c. Contingent debt
d. Captives
19. Identify which of the following needs to be allocated to each block in a schematic block diagram.
a. Only II
b. I and II
c. I and III
d. II and III
20. Identify which of the following options are strategies to manage risk.
a. Only 1
b. Only 3
c. Both 1 and 2
d. Both 1 and 3
