ACE Risk Assessment & Underwriting 1 — Questions and Answers
Question 1: What is the first step in risk management for ACORD Certified Expert?
- Implementing controls
- Identifying potential risks and hazards (Correct answer)
- Writing a risk report
- Transferring risk to insurance
Correct answer: Identifying potential risks and hazards
Risk identification is the first step; you must know what risks exist.
Question 2: What is a risk matrix used for in ACORD Certified Expert?
- Calculating budgets
- Evaluating risks based on likelihood and impact (Correct answer)
- Scheduling meetings
- Tracking performance
Correct answer: Evaluating risks based on likelihood and impact
A risk matrix plots risks on likelihood versus impact to help prioritize.
Question 3: What does risk mitigation mean in ACORD Certified Expert?
- Eliminating all risks
- Taking steps to reduce likelihood or impact of risks (Correct answer)
- Ignoring low-level risks
- Accepting all risks
Correct answer: Taking steps to reduce likelihood or impact of risks
Risk mitigation reduces the probability or potential impact of risks.
Question 4: Which strategy involves transferring risk to a third party in ACORD Certified Expert?
- Avoidance
- Mitigation
- Transfer (e.g., insurance) (Correct answer)
- Acceptance
Correct answer: Transfer (e.g., insurance)
Risk transfer shifts the financial impact to another party, commonly through insurance.
Question 5: What is a risk register in ACORD Certified Expert?
- A sign-in sheet
- A documented list of risks with analysis and response plans (Correct answer)
- A financial ledger
- An employee directory
Correct answer: A documented list of risks with analysis and response plans
A risk register records all identified risks, their assessment, and planned responses.
Question 6: When should risk assessments be updated in ACORD Certified Expert?
- Only at project start
- Regularly and whenever significant changes occur (Correct answer)
- Only after incidents
- Once per year
Correct answer: Regularly and whenever significant changes occur
Risk assessments should be updated regularly and when conditions change.
ACE Risk Assessment & Underwriting 1
What is the first step in risk management for ACORD Certified Expert?