In a risk management (RM) process certain steps should be taken in a certain order. The steps, not necessarily in order, are:

1. manage the risks using appropriate RM tools

2. measure the risks.

3. identify the risks.

4. decide how much of each risk to bear.

The correct order for the RM Process is:

A. 1, 2, 3, 4 exactly as above.

B. 4, 1, 3, 2

C. 3, 2, 4, 1

D. 2, 1, 4, 3 5.

Which of the following might be a major risk to the airline industry as a whole:

A. Personnel risk.

B. Commodity price risk.

C. Pandemic risk.

D. Mortality/Longevity risk.

E. Both B and C.

F. Both A and D.

6. Which of the following moments of a distribution is a measure of symmetry?

A. Mean

B. Variance

C. Kurtosis

D. Skewness

7. Suppose that you believe that there is a relationship between variables Y, X, and W. Specifically, you believe that the relationship takes the form:

Y = aXbWc

You would like to estimates the three parameters, a, b, and c, of the equation using multiple linear regression. Which of the following is true:

A. You could take the natural logarithm of both sides to transform the equation to a linear form and then proceed to apply linear regression. The regression would produce a direct estimate of b and c, but you would have to apply the exponential function to your result to get a.

B. The equation is not linear so linear regression cannot be used to solve for the parameters.

C. The equation is linear so you could apply the linear regression directly to the data. D. None of the above are true.