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CIPS L5M2 Exam - Topic 2 Question 51 Discussion

Actual exam question for CIPS's L5M2 exam
Question #: 51
Topic #: 2
[All L5M2 Questions]

Portobello is an Italian manufacturing company that produces canned tomato sauces. It imports a lot of its tomatoes from Latin America as there isn't the capacity to grow that many tomatoes in Italy. One of the major risks posing Portobello is that the tomatoes must be transported via cargo ship, and there is a risk that the ship may sink, or be delayed by bad weather. Portobello has taken out insurance to cover the cost of the tomatoes should this happen. What technique has Portobello used?

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Suggested Answer: A

The correct answers are as follows:

CSR= Corporate Social Responsibility


by Jules at Jan 26, 2025, 12:43 PM

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Lonny
3 months ago
Not sure if insurance really covers all the risks though.
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Beth
3 months ago
I think they treat the risk by taking out insurance, right?
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Charlesetta
3 months ago
Wait, they can't grow enough tomatoes in Italy? That's surprising!
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Argelia
4 months ago
Totally agree, they definitely transfer the risk with insurance.
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Junita
4 months ago
Portobello imports tomatoes from Latin America!
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Kris
4 months ago
I thought "tolerate" meant just accepting the risk, but insurance seems more proactive. So, I guess it must be "transfer," but I’m not completely confident.
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Cory
4 months ago
I practiced a question similar to this where a company used insurance to cover losses. I think that means they are transferring the risk, but I could be wrong.
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Tuyet
4 months ago
I'm not entirely sure, but I remember something about treating risks directly. But in this case, insurance feels more like transferring the risk to the insurer.
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Candra
5 months ago
I think Portobello is trying to manage the risk by transferring it, right? They got insurance for the tomatoes, which seems like a classic case of risk transfer.
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Moon
5 months ago
I'm a little confused by this question. The options don't seem to match up perfectly with the situation described. I'll have to re-read it a few times and see if I can figure out the best approach.
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Lavera
5 months ago
Okay, I think I've got it. Portobello is transferring the risk of the tomato shipments to an insurance company, so the correct answer is "transfer". That makes sense given the information provided.
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Leota
5 months ago
Hmm, I'm a bit unsure about this one. The question mentions that Portobello has a "major risk" with the tomato shipments, but it's not clear if they're actually trying to manage that risk or just accepting it. I'll have to think this through carefully.
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Geraldine
5 months ago
This seems like a straightforward risk management question. Portobello has taken out insurance to cover the cost of the tomatoes in case the cargo ship sinks or is delayed, so the answer is clearly "transfer".
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Paris
10 months ago
Haha, terminating the weather, I like it! Although I think that would be a bit overkill. Transfer is definitely the right answer here.
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Xochitl
9 months ago
C) transfer
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Goldie
9 months ago
B) treat
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Cherri
9 months ago
A) tolerate
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Dulce
10 months ago
All these options sound a bit dry. Can we add some spice to this question? How about 'terminate' the bad weather with a flamethrower?
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Salena
8 months ago
Yeah, it might be a bit extreme. Maybe they should stick to insurance.
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Katina
8 months ago
D) terminate
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Trina
8 months ago
C) transfer
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Casey
8 months ago
B) treat
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Shawnee
8 months ago
A) tolerate
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Denna
8 months ago
Haha, I don't think a flamethrower would work on bad weather!
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Josphine
8 months ago
D) terminate
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Holley
9 months ago
C) transfer
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Merilyn
9 months ago
B) treat
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Paris
9 months ago
A) tolerate
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Edgar
9 months ago
That would definitely add some spice to the situation!
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Janessa
9 months ago
D) terminate
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Terrilyn
9 months ago
C) transfer
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Germaine
9 months ago
B) treat
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Jerry
10 months ago
A) tolerate
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Dexter
10 months ago
Yes, transferring the risk through insurance is a smart move for Portobello.
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Carmen
10 months ago
I agree, transferring the risk is the way to go. Paying for insurance is better than eating the cost of the tomatoes yourself.
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Cassi
9 months ago
I agree, transferring the risk is the way to go. Paying for insurance is better than eating the cost of the tomatoes yourself.
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Joni
9 months ago
D) terminate
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Billy
10 months ago
C) transfer
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Giovanna
10 months ago
B) treat
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Xochitl
10 months ago
A) tolerate
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Myra
11 months ago
Transfer seems like the obvious choice here. Portobello is transferring the risk of the tomatoes being lost or delayed to an insurance company.
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Alishia
11 months ago
I agree with Eugene, Portobello has transferred the risk by taking out insurance.
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Eugene
11 months ago
I think the technique used is transfer.
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