Free CIPS L5M2 Practice Exam with Questions & Answers | Set: 3

Explanation

2 and 4 are correct. Audits should be unscheduled so that any issues can't be covered up in advance. Interviews with workers should also be conducted in private as this will allow them to speak their mind with confidence. Where interviews are conducted as a group there may be peer-pressure to say the correct thing. especially if there are managers around. see p.88 for information on Audits

Explanation

The correct answers are as follows:

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CSR= Corporate Social Responsibility

Explanation

The correct answers are as follows:

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Cashflow issues can lead to serious financial problems and the company going bust. Therefore this risk must be treated.

Explanation

Advantages of ISO28000 are competitive advantage and cost savings. The textbook explains that cost savings come through a reduction in security incidents. For more info on ISO28000 see p. 141

Explanation

This is used to engage stakeholders in the development of risk assessments. P. 137-138

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A forward contract would fix the exchange rate at a certain level, allowing for cost certainty. This mitigates the risk of the currency getting any weaker.

Explanation

An underwriter evaluates insurance applications. Learn the difference between Insurance Underwriters and Claims Adjusters for the exam - this is a known topic. (A claims adjuster determines the validity of an insurance claim).

Explanation

This is the description of treat mentioned on p. 143. The 4 Ts is a popular exam topic

Explanation

This is a 'swap' and is explained on p.94. This is a type of 'hedging' but there is no such thing as 'a hedge'. For a more in-depth look at Swaps see: https://www.mercatusenergy.com/blog/bid/77634/an-introduction-to-airline-fuel-hedging-strategies-swaps

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The company should ensure they have the correct levels of Employer's Liability insurance as staff are getting injured. This transfers the risk to the insurance company. (I mean they should probably do something to stop the staff getting hurt too... but this is just an imaginary example question....)