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block

The ISO 31000 Standard provides risk management principles, a framework, and process. One part of the process includes risk identification, risk analysis, and risk evaluation. This part of the process is

Select the correct answer(s).  

(0/0)

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Risk criteria

Risk treatment

Risk assessment

Risk control

none

Which one of the following statements is true regarding Basel III?

Select the correct answer(s).  

(0/0)

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Basel III is a regulatory standard for banks of the European Union and the United Kingdom

Basel III was developed to reduce the likelihood of insurer insolvency, market disruption, and consumer loss

Basel III is a voluntary standard for the insurers which encourages senior management to take the lead in establishing a strong risk management culture

Basel III was developed to address both the risk of individual organizations and systemic risk in the banking sector

none

The COSO Enterprise Risk Management Integrated Framework is designed to help an organization achieve its objectives in four categories, One category is the effective and efficient use of company resources. This category is the

Select the correct answer(s).  

(0/0)

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Compliance category

Strategic category

Operations category

Reporting category

none

In an effort to grow its personal lines book, an insurer decides to offer discounts on homeowners and personal auto insurance to the employees of its largest business lines account. Which one of the following risk measures is most likely to increase as a result of this marketing decision?

Select the correct answer(s).  

(0/0)

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Consequences

Time horizon

Correlation

Volatility

none

All of the following are correct with respect to the recognition of expected losses in the cash flow analysis of an investment proposal, EXCEPT

Select the correct answer(s).  

(0/0)

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Cash flow analysis adds the cost of expected losses to a proposal's initial investment in evaluating the net cash flow

The recognition of accidental losses in cash flow analysis may have a significant effect on the decision to undertake a proposal

Once risk managers recognize the costs associated with accidental losses, they can analyze the effects of various risk control and risk financing techniques on those losses

Factoring in expected losses can reduce both the net present value and the internal rate of return of an investment porposal

none

Which one of the following statement is true if earning at risk are $200,000 with 90% confidence

Select the correct answer(s).  

(0/0)

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Earnings at risk are projected to be less than $200,000 10% of the time

Earnings at risk are projected to be greater than $200,000 10% of the time

Earnings at risk are projected to be $180,000

Earnings at risk are projected to be $200,000 90% of the time

none

Which one of the follonwing is te correct explanation of how expected accidental losses associated with a project should be considered when evaluating a capital budgeting project?

Select the correct answer(s).  

(0/0)

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The expected accidental losses should be subtracted from the net present value that was calculated

The expected accidental losses should be subtracted from the after-tax net cash flow

The expected accidental losses should be subtracted from cash revenues before taxes are considered.

The expected accidental losses should not be subtracted directly, but used to reduce taxable income before applying the tax rate

none

Economic capital is defined as

Select the correct answer(s).  

(0/0)

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The economic value of the firm if all of the risky assets were converted into their equivalent risk-free value

The market value of a firm's total assets less the market value of the firm's total liabilities

The amount of capital is required to maintain solvency at a given risk tolerance level

The minimum level of capital a firm will need at any point in time to generate the minimum rate of return required by the suppliers of capital

none

Garnett owns a commercial building and has a lease with a tenant which calls for rental payments to increase annually. To evaluate the lease, she wants to determine the present value for the building's income and then compare that to her costs. The first year's rent is set at $10,000, the second year is $15,000, third year is $20,000, and the 4th year is $25,000. Payments are made on the first day of each year. Assuming a 5 percent interest rate, the present value of the rental income as of the date of the first payment is

Select the correct answer(s).  

(0/0)

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64,021

61,449

66,291

60,974

none

Liability entries on an organization's balance sheet are particularly useful to the risk management professional for exploring which one of the following loss exposures

Select the correct answer(s).  

(0/0)

---

Loss exposures that reduce revenue

Net income

Personnel

Obligations such a mortgage payments

none

Amanda is chief legal counsel at Insurance Company. The company's board wanted to make sure that the company's internal controls were current and working properly and they asked Amanda to review internal controls in each functional area. To test the system, Amanda had three fictitious claims submitted to the system for payment. Because the claims were not sufficiently documented, they were not paid and were flagged for investigation. Which component of the COSO framework for internal controls did Amanda test?

Select the correct answer(s).  

(0/0)

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RIsk assessment

Monitoring

Control activities

INformation and communication

none

A data analysis technique that an insurer would likely use to analyze claims adjuster's notes is

Select the correct answer(s).  

(0/0)

---

Text mining

Social network analysis

A classification tree

Regression

none

Mega -Brands is an anchor store at Giganto Mall. If Mega-Brands is shut down due to fire, the local community may sustain which one of the following consequences?

Select the correct answer(s).  

(0/0)

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Enhanced tax revenue

Job loss

Increased retail activity

Improved traffic flow

none

Be-Ne-Lux Insurance is an insurer opertating in Belgium, the Netherlands, and Luxembourg. Be-Ne-Lux is subject to the Solvency II standards. Company managers believed the company was adequately financed, however it was determined that the company did not have adequate assets based on the uncertainty of its operating performance. The standard that Be-Ne-Lux failed to meet isRisk

Select the correct answer(s).  

(0/0)

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Own risk and solvency assessment

Risk-based capital

Basel II

Underwriting leverage

none

The use of risk quadrants to identify and categorize risk can provide a framework for holistic risk identification. One quadrant includes such risks as loss of production due a key due a key supplier not delivering raw materials or a mechanical breakdown of equipment. This risk quadrant is

Select the correct answer(s).  

(0/0)

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Hazard risk

Operational risk

Financial risk

Strategic risk