ARM 401 Exam Practice
2026 | Questions, Answers
& Detailed Rationales
Study Guide
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Updated 2026 Questions and Answers
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Rationales
Included
,SoCal Movie Company produces movies at a studio in B
Southern California. The risk manager decided to identify
the range of potential consequences associated with
various risks that the company faces. For example, if a
severe earthquake occurred while the company was
filming a movie, there could be deaths and injuries,
destruction of movie sets, delays in production, costs
associated with filming at an alternative location, and loss
of reputation and good will. The type of analysis
performed by the risk manager is called
A. SWOT analysis.
B. Scenario analysis.
C. Sensitivity analysis.
D. HAZOP analysis.
Insurance Company (IC) sells its coverages through D
independent insurance agents. Independent agents
represent several insurance companies. Tom, the
president of IC, has learned that the independent agent
who is the highest producer for IC is considering selling
his agency. IC is considering acquiring the agency since
Tom is concerned that if the agency is sold, IC may lose a
substantial amount of business. Tom asked IC's risk
manager to analyze the prospective purchase. The
analysis revealed that the acquisition would likely secure
most of IC's book of business with the agency but also
revealed local competitors that would try to place the
business as well. In addition, the analysis revealed the
opportunity for IC to move some accounts currently
placed with other insurers over to IC. Also, it was learned
that a competitor expressed an interest in the agency
acquisition. The analysis performed by the risk manager is
a form of
A. Decision tree analysis.
B. HAZOP analysis.
C. Risk map analysis.
D. SWOT analysis.
, Murray Trucking is interested in evaluating which risk C
factors are most likely to lead to the most costly
accidents. They are evaluating risk factors such as speed,
weather conditions, driver experience, distance traveled,
and gross vehicle weight. Which one of the following
statistical measurements would be useful for the risk
manager when calculating the probability of the different
risk factors causing severe accidents?
A. Telematics
B. Inverse covariance
C. Variance
D. Monte Carlo simulation
Blithe Manufacturing has experienced a drop in market C
share. The marketing department has come up with a way
to differentiate their product in order to regain market
share. Blithe has assembled a team of individuals
representing different organizational functions to analyze
both internal and external factors of the new product and
decide whether or not it is feasible. Which one of the
following team approaches to risk identification is Blithe
using?
A. Delphi technique
B. HAZOP workshop
C. SWOT analysis
D. Scenario analysis
William is a project manager for Parker International. He B
has been assigned a key project with a short deadline.
William realizes that this project is going to require
revising the job duties of some individuals and a
collaborative effort from of all team members. When
revising job duties, William should do which one of the
following?
A. Overload some individuals with more work than others
B. Try to enrich individuals' work rather than merely
expand it
C. Rely on the most senior individuals to take on
additional duties
D. Focus on the individuals' personality rather than results
2026 | Questions, Answers
& Detailed Rationales
Study Guide
|Graded A+ | Guaranteed
success|
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales
Included
,SoCal Movie Company produces movies at a studio in B
Southern California. The risk manager decided to identify
the range of potential consequences associated with
various risks that the company faces. For example, if a
severe earthquake occurred while the company was
filming a movie, there could be deaths and injuries,
destruction of movie sets, delays in production, costs
associated with filming at an alternative location, and loss
of reputation and good will. The type of analysis
performed by the risk manager is called
A. SWOT analysis.
B. Scenario analysis.
C. Sensitivity analysis.
D. HAZOP analysis.
Insurance Company (IC) sells its coverages through D
independent insurance agents. Independent agents
represent several insurance companies. Tom, the
president of IC, has learned that the independent agent
who is the highest producer for IC is considering selling
his agency. IC is considering acquiring the agency since
Tom is concerned that if the agency is sold, IC may lose a
substantial amount of business. Tom asked IC's risk
manager to analyze the prospective purchase. The
analysis revealed that the acquisition would likely secure
most of IC's book of business with the agency but also
revealed local competitors that would try to place the
business as well. In addition, the analysis revealed the
opportunity for IC to move some accounts currently
placed with other insurers over to IC. Also, it was learned
that a competitor expressed an interest in the agency
acquisition. The analysis performed by the risk manager is
a form of
A. Decision tree analysis.
B. HAZOP analysis.
C. Risk map analysis.
D. SWOT analysis.
, Murray Trucking is interested in evaluating which risk C
factors are most likely to lead to the most costly
accidents. They are evaluating risk factors such as speed,
weather conditions, driver experience, distance traveled,
and gross vehicle weight. Which one of the following
statistical measurements would be useful for the risk
manager when calculating the probability of the different
risk factors causing severe accidents?
A. Telematics
B. Inverse covariance
C. Variance
D. Monte Carlo simulation
Blithe Manufacturing has experienced a drop in market C
share. The marketing department has come up with a way
to differentiate their product in order to regain market
share. Blithe has assembled a team of individuals
representing different organizational functions to analyze
both internal and external factors of the new product and
decide whether or not it is feasible. Which one of the
following team approaches to risk identification is Blithe
using?
A. Delphi technique
B. HAZOP workshop
C. SWOT analysis
D. Scenario analysis
William is a project manager for Parker International. He B
has been assigned a key project with a short deadline.
William realizes that this project is going to require
revising the job duties of some individuals and a
collaborative effort from of all team members. When
revising job duties, William should do which one of the
following?
A. Overload some individuals with more work than others
B. Try to enrich individuals' work rather than merely
expand it
C. Rely on the most senior individuals to take on
additional duties
D. Focus on the individuals' personality rather than results
