ARM 400 EXAM 2026/2027 QUESTIONS AND
CORRECT ANSWERS GRADED A+
Which one of the following statements is true regarding the basic measures that
apply to risk management?
A. Consequences measure the degree to which an occurrence could positively or
negatively affect an organization.
B. Hedging is a risk management strategy that can reduce the risk of correlation.
C. Risk increases as volatility decreases.
D. Longer time horizons are generally less risky that shorter ones.
A
Which one of the following provides a measure of the maximum potential damage
associated with an occurrence?
A. Exposure
B. Duration
C. Underwriting risk
D. Maximum probable loss
A
Samuel was recently hired as a risk management professional for Parker Property
Management. He has been asked by senior management to review the
organization's current insurance policies to make sure that the organization is
adequately protected, and also see if there are any opportunities to save on the
,premiums. Samuel must do which one of the following through internal
communication before he will be able to complete this task?
A. Determine the organization's risk appetite
B. Identify all of the risks that the organization faces
C. Earn the confidence of the organization's board of directors
D. Become familiar with industry regulations
A
Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out
a need for many organizations to evaluate and manage their
A. Supply-chain risk.
B. Derivative risk.
C. Compliance risk.
D. Political risk.
A
Risk management professionals must collaborate with data analysts during which
two steps of the risk management process?
A. Treat risks and monitor risk treatments
B. Scan the environment and analyze risks
C. Analyze risks and monitor risk treatments
D. Identify risks and treat risks
C
,When communicating a decision up the organization's chain of command,
consulting with outside experts can help a risk management professional do which
one of the following?
A. Seek feedback from stakeholders
B. Stay focused on the organization's objectives
C. Define the organization's risk appetite
D. Enhance stakeholders' confidence in the process
D
Which of the following risk management program goals is an essential goal for all
public entities?
A. Earning stability
B. Continuity of operations
C. Growth
D. Survival
B
The traditional definition of risk management reflects the traditional concept of
risk as
A. Both positive and negative.
B. Negative.
C. Uncontrollable.
D. Strategic.
B
, During the past year, International Toys has undertaken four capital projects. The
company has renovated and refurbished one of its aging warehouse buildings. It
has purchased the most recent version of its current order processing computer
software. It has added two trucks to its fleet of delivery vehicles. Lastly, it has
purchased a new production machine that will allow it to launch a new product
line. Which one of the following company projects is the most speculative risk?
A. The two new trucks
B. The warehouse refurbishment
C. The software upgrade
D. The new production machine
D
Asking a question such as "How do you think this will work out?" can help a
speaker do which one of the following?
A. Request feedback and determine if the message has been understood
B. Gain the support of executives and decision makers
C. Build trust among a diverse group of individuals
D. Deliver a message that recipients don't want to hear
A
Carla, the risk manager, was asked by senior management to deliver a presentation
on cyber risk at an all employees meeting. Even though she was only allotted 30
minutes for her presentation, Carla felt that cyber risk was a very real risk for the
corporation and she wanted employees to leave with some fear of it. She wanted to
provide employees with as much technical information as possible, and familiarize
CORRECT ANSWERS GRADED A+
Which one of the following statements is true regarding the basic measures that
apply to risk management?
A. Consequences measure the degree to which an occurrence could positively or
negatively affect an organization.
B. Hedging is a risk management strategy that can reduce the risk of correlation.
C. Risk increases as volatility decreases.
D. Longer time horizons are generally less risky that shorter ones.
A
Which one of the following provides a measure of the maximum potential damage
associated with an occurrence?
A. Exposure
B. Duration
C. Underwriting risk
D. Maximum probable loss
A
Samuel was recently hired as a risk management professional for Parker Property
Management. He has been asked by senior management to review the
organization's current insurance policies to make sure that the organization is
adequately protected, and also see if there are any opportunities to save on the
,premiums. Samuel must do which one of the following through internal
communication before he will be able to complete this task?
A. Determine the organization's risk appetite
B. Identify all of the risks that the organization faces
C. Earn the confidence of the organization's board of directors
D. Become familiar with industry regulations
A
Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out
a need for many organizations to evaluate and manage their
A. Supply-chain risk.
B. Derivative risk.
C. Compliance risk.
D. Political risk.
A
Risk management professionals must collaborate with data analysts during which
two steps of the risk management process?
A. Treat risks and monitor risk treatments
B. Scan the environment and analyze risks
C. Analyze risks and monitor risk treatments
D. Identify risks and treat risks
C
,When communicating a decision up the organization's chain of command,
consulting with outside experts can help a risk management professional do which
one of the following?
A. Seek feedback from stakeholders
B. Stay focused on the organization's objectives
C. Define the organization's risk appetite
D. Enhance stakeholders' confidence in the process
D
Which of the following risk management program goals is an essential goal for all
public entities?
A. Earning stability
B. Continuity of operations
C. Growth
D. Survival
B
The traditional definition of risk management reflects the traditional concept of
risk as
A. Both positive and negative.
B. Negative.
C. Uncontrollable.
D. Strategic.
B
, During the past year, International Toys has undertaken four capital projects. The
company has renovated and refurbished one of its aging warehouse buildings. It
has purchased the most recent version of its current order processing computer
software. It has added two trucks to its fleet of delivery vehicles. Lastly, it has
purchased a new production machine that will allow it to launch a new product
line. Which one of the following company projects is the most speculative risk?
A. The two new trucks
B. The warehouse refurbishment
C. The software upgrade
D. The new production machine
D
Asking a question such as "How do you think this will work out?" can help a
speaker do which one of the following?
A. Request feedback and determine if the message has been understood
B. Gain the support of executives and decision makers
C. Build trust among a diverse group of individuals
D. Deliver a message that recipients don't want to hear
A
Carla, the risk manager, was asked by senior management to deliver a presentation
on cyber risk at an all employees meeting. Even though she was only allotted 30
minutes for her presentation, Carla felt that cyber risk was a very real risk for the
corporation and she wanted employees to leave with some fear of it. She wanted to
provide employees with as much technical information as possible, and familiarize
