Risk Management Flashcard

Front

What is Rakiyah's role in the company where she is responsible for the planning, controlling, preventing, and limiting of business losses and enhancing possibilities for gain?

Back

CRO (chief risk officer)

Answer explanation

An executive responsible for planning, controlling, and preventing business losses is known as a CRO (chief risk officer), making it the correct choice.

Front

When Mizani covers the windows of her bakery with plywood to protect them from approaching hurricane winds, what is she trying to do with the risk?

Back

mitigate

Answer explanation

Bob is trying to mitigate the risk by covering the windows with plywood to protect them from hurricane winds.

Front

What type of liability insurance is Lauren advising Rakiyah to purchase for her dental practice to cover legal expenses in case of a negligence lawsuit?

Back

malpractice

Answer explanation

Anna is advising Tracy to purchase malpractice insurance to cover legal expenses in case of negligence lawsuits from patients.

Front

What will likely occur if Lauren fails to inform her employer about her coworker Jamari's embezzling activities?

Back

The company's financial risk will increase.

Answer explanation

If Michelle fails to inform her employer about Ted's embezzling, the company's financial risk will increase due to potential losses and legal implications.

Front

When planning a school event, Rakiyah and Korey are assessing the two dimensions of risk. What are these dimensions?

Back

probability and impact.

Answer explanation

The two dimensions of risk are probability and impact, which assess the likelihood of an event occurring and the consequences if it does.

Front

How is the behavior of a health food company, endorsed by Arnez, that falsely claims its products can cure many diseases considered?

Back

unethical.

Answer explanation

The behavior of a health food company falsely claiming its products can cure diseases is considered unethical because it involves deception and can harm consumers.

Front

Which of the following would be a good source of information about the retroactive risks of Korey's new startup?
environmental scan.
purchasing manager.
business incident log.
local weather forecast.

Back

business incident log.

Answer explanation

The correct choice for a good source of information about the retroactive risks of a business is the business incident log, as it records past incidents and can help identify patterns and potential risks.

Front

Which is true about a captive agent relationship in the context of insurance? Options: A captive agent like Mason owns all clients that he/she services. The captive agent, such as Lauren, is guided by dual agency guidelines. The insurer owns and maintains control of all accounts serviced by the captive agent, like Arnez. A captive agent, represented by Mizani, has the right to rewrite the insured if he/she terminates his/her relationship with the insurer.

Back

The insurer owns and maintains control of all accounts serviced by the captive agent, like Arnez.

Answer explanation

The insurer owns and maintains control of all accounts serviced by the captive agent, making this statement true about a captive agent relationship.

Front

What type of insurance will Jeremiah's insurance company likely consider for him given his multiple traffic challenges including tickets and accidents?

Back

reinsurance

Answer explanation

Paulo's driving history indicates a high risk, so his insurance company will need to get reinsurance to cover potential losses.

Front

Mizani, who recently started working at an insurance company, learned that the industry generates the funds needed to pay the claims of policyholders by:

Back

investing money from premiums.

Answer explanation

The insurance industry generates the funds needed to pay the claims of policyholders by investing money from premiums.