ARM 401 COMPREHENSIVE EXAMS SET
TESTED QUESTIONS AND CORRECT
ANSWERS
●● strategic risk
Answer: -uncertainties associated with the organization's long-term
goals and management decisions
-may carry a greater risk dynamic, positive or negative, that the other
categories
●● operational risk
Answer: uncertainties associated with the organization's procedures,
systems, and policies
●● financial risk
Answer: uncertainties associated with the organization's financial
activities
●● today's conception of risk
Answer: incorporates the idea that taking risks is fundamentally
necessary for growth
●● predictive modeling
,Answer: can empower decision making by uncovering previously
imperceptible risk factors
●● Internet of Things
Answer: network of devices that sense their environment, process data,
and share it instantly
●● cloud computing
Answer: enables orgs to store and share data through wireless internet
and networking services
●● blockchain technology
Answer: -facilitates secure transactions without the need for a third party
-protects against cyber threats
-eliminates the need to verify the accuracy of risk management data
-lets risk managers spend more time on forward-looking functions
●● what fuels the future of holistic risk management?
Answer: the capture, storage, and analysis of data
●● covariance
Answer: -the measure of how two random risk variables will change in
relation to each other
,-calculates correlation between the variables
●● variance
Answer: -the spread of the data set, or how far apart the numbers are in
relation to the mean
●● team approaches to risk identification
Answer: 1. facilitated workshops
2. Delphi technique
3. scenario analysis
4. HAZOP
5. SWOT
●● why is it important to take a team-oriented approach to identifying
risks?
Answer: -provide diverse perspectives on risks
-can reveal how risks are connected across an org, reducing the
likelihood for risks to be overlooked
●● facilitated workshops
Answer: -a neutral party, who has no stake in the outcome, administers
the risk workshop and propels the group to achieve its goal
-wise to include people from diverse groups
, -can be used for a specific project or process, as well as to identify those
risks that affect overall org objectives
-if using to identify all org risks: facilitator must be skilled in risk ID and
management as well as group communication and be prepared for a
long-term project
●● delphi technique
Answer: -uses the opinions of a select group of experts to identify risks
-typically they don't meet but respond to a survey or inquiry instead
-question-and-response cycle: answer question anonymously, see results,
answer same question until reach consensus
-benefits: cost-effective, eliminates group bias and encourages honesty
by anonymity
-disadvantages: experts' opinions may be limited to their current
thinking on a subject
●● scenario analysis
Answer: -identifies risks and predicts the potential consequences of
those specific risks
-can help identify a range of potential consequences and prioritize risks
-benefit is it brings all the concerns of different parts of the org together
so they can be addressed as a whole
-should assemble an internal cross-functional team to get a
multidimensional view
TESTED QUESTIONS AND CORRECT
ANSWERS
●● strategic risk
Answer: -uncertainties associated with the organization's long-term
goals and management decisions
-may carry a greater risk dynamic, positive or negative, that the other
categories
●● operational risk
Answer: uncertainties associated with the organization's procedures,
systems, and policies
●● financial risk
Answer: uncertainties associated with the organization's financial
activities
●● today's conception of risk
Answer: incorporates the idea that taking risks is fundamentally
necessary for growth
●● predictive modeling
,Answer: can empower decision making by uncovering previously
imperceptible risk factors
●● Internet of Things
Answer: network of devices that sense their environment, process data,
and share it instantly
●● cloud computing
Answer: enables orgs to store and share data through wireless internet
and networking services
●● blockchain technology
Answer: -facilitates secure transactions without the need for a third party
-protects against cyber threats
-eliminates the need to verify the accuracy of risk management data
-lets risk managers spend more time on forward-looking functions
●● what fuels the future of holistic risk management?
Answer: the capture, storage, and analysis of data
●● covariance
Answer: -the measure of how two random risk variables will change in
relation to each other
,-calculates correlation between the variables
●● variance
Answer: -the spread of the data set, or how far apart the numbers are in
relation to the mean
●● team approaches to risk identification
Answer: 1. facilitated workshops
2. Delphi technique
3. scenario analysis
4. HAZOP
5. SWOT
●● why is it important to take a team-oriented approach to identifying
risks?
Answer: -provide diverse perspectives on risks
-can reveal how risks are connected across an org, reducing the
likelihood for risks to be overlooked
●● facilitated workshops
Answer: -a neutral party, who has no stake in the outcome, administers
the risk workshop and propels the group to achieve its goal
-wise to include people from diverse groups
, -can be used for a specific project or process, as well as to identify those
risks that affect overall org objectives
-if using to identify all org risks: facilitator must be skilled in risk ID and
management as well as group communication and be prepared for a
long-term project
●● delphi technique
Answer: -uses the opinions of a select group of experts to identify risks
-typically they don't meet but respond to a survey or inquiry instead
-question-and-response cycle: answer question anonymously, see results,
answer same question until reach consensus
-benefits: cost-effective, eliminates group bias and encourages honesty
by anonymity
-disadvantages: experts' opinions may be limited to their current
thinking on a subject
●● scenario analysis
Answer: -identifies risks and predicts the potential consequences of
those specific risks
-can help identify a range of potential consequences and prioritize risks
-benefit is it brings all the concerns of different parts of the org together
so they can be addressed as a whole
-should assemble an internal cross-functional team to get a
multidimensional view
