CIPS L5M2 Exam - Topic 2 Question 51 Discussion

Actual exam question for CIPS's L5M2 exam

Question #: 51
Topic #: 2

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?

Atolerate

Btreat

Ctransfer

Dterminate

Show Suggested Answer

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

9 months ago

Not sure if insurance really covers all the risks though.

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Beth

9 months ago

I think they treat the risk by taking out insurance, right?

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Charlesetta

10 months ago

Wait, they can't grow enough tomatoes in Italy? That's surprising!

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Argelia

10 months ago

Totally agree, they definitely transfer the risk with insurance.

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Junita

10 months ago

Portobello imports tomatoes from Latin America!

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Kris

10 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

11 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

11 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

11 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

11 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

11 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

11 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

11 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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