ARM 401 EXAM SCRIPT VERIFIED
QUESTIONS WITH FULL SOLUTION
●● SWOT analysis (strengths, weaknesses, opportunities, threats)
Answer: A SWOT analysis is useful when there is a specific goal, such
as determining whether engaging in a new product or project is feasible.
It's less useful for analyzing current processes and procedures to identify
risks unless there is a specific objective, such as whether a procedure
conforms to new regulations or customer specifications. A goal is
necessary to keep the SWOT analysis from becoming too general or
failing to provide actionable information. Generally "go" or "no go"
●● Risk Threshold
Answer: The range or amount of risk that is acceptable
●● Radio Frequency Identification (RFID)
Answer: A technology that uses radio frequency to identify objects
●● Artificial Intelligence
Answer: Computer processing or output that simulates human reasoning
or knowledge
●● Computer Vision
,Answer: A technology that simulates human vision
●● Risk registers should always do these 4 things:
Answer: Identifies the organization's risks appropriately
Prioritizes risks according to their potential effects on the organization
Allows for collaboration and instant updating by risk managers and
stakeholders
Tracks improvement actions to take, when they're taken, and when a
follow-up or review will occur
●● Risk Register
Answer: A tool developed at the risk owner level that links specific
activities, processes, projects, or plans to a list of identified risks and
results of risk analysis and evaluation and that is ultimately consolidated
at the enterprise level
●● Risk Map vs Risk Register
Answer: An organization would use a risk register to identify, describe,
and prioritize the risks of either a specific circumstance (such as a
process, project, or risk event) or the organization as a whole. It's
essentially a ledger to document risks and all information related to
them. A risk map, on the other hand, is developed after a risk register
and incorporates information from the register. A risk map provides a
visual representation of a risk register's data to show which risks are the
highest priority for risk managers and owners.
,●● Relationship between inherent, residual, and optimuml risk
Answer: if the difference between the inherent risk and what the residual
risk will be after a treatment is applied is small, either the risk doesn't
need to be treated or the treatment itself isn't effective enough. The
difference between the residual risk and optimum risk represents how
much further a risk can be reduced
●● Risk Map
Answer: A template depicting the likelihood and potential
impact/consequences of risks
●● Inherent Risk
Answer: The level of risk that would be faced if it were to remain
untreated or no action were to be taken to alter the level of risk
●● Residual Risk
Answer: The level of risk remaining after actions are taken to alter the
level of risk
●● Optimum Risk
Answer: The level of risk that is within an organization's risk appetite
●● Coordination
, Answer: the act of improving efficiency and reducing redundancy by
some combination of arranging, assigning, organizing, or scheduling
activities
●● Collaboration vs. Cooperation
Answer: Collaboration is the act of working together to achieve a shared
objective. Cooperation is the act of working together to achieve
individual objectives instead of a shared objective
●● Predictive techniques, such as decision tree analysis and event tree
analysis:
Answer: assign numerical values to various components related to a risk
and combine them to produce a probability estimate
●● Risk Control
Answer: A conscious act or decision not to act that reduces the
frequency and/or severity of losses or makes losses more predictable
●● Three categories of accident causes:
Answer: poor management, safety policy, and personal or environmental
factors
●● Sequence of Events (Domino Theory)
QUESTIONS WITH FULL SOLUTION
●● SWOT analysis (strengths, weaknesses, opportunities, threats)
Answer: A SWOT analysis is useful when there is a specific goal, such
as determining whether engaging in a new product or project is feasible.
It's less useful for analyzing current processes and procedures to identify
risks unless there is a specific objective, such as whether a procedure
conforms to new regulations or customer specifications. A goal is
necessary to keep the SWOT analysis from becoming too general or
failing to provide actionable information. Generally "go" or "no go"
●● Risk Threshold
Answer: The range or amount of risk that is acceptable
●● Radio Frequency Identification (RFID)
Answer: A technology that uses radio frequency to identify objects
●● Artificial Intelligence
Answer: Computer processing or output that simulates human reasoning
or knowledge
●● Computer Vision
,Answer: A technology that simulates human vision
●● Risk registers should always do these 4 things:
Answer: Identifies the organization's risks appropriately
Prioritizes risks according to their potential effects on the organization
Allows for collaboration and instant updating by risk managers and
stakeholders
Tracks improvement actions to take, when they're taken, and when a
follow-up or review will occur
●● Risk Register
Answer: A tool developed at the risk owner level that links specific
activities, processes, projects, or plans to a list of identified risks and
results of risk analysis and evaluation and that is ultimately consolidated
at the enterprise level
●● Risk Map vs Risk Register
Answer: An organization would use a risk register to identify, describe,
and prioritize the risks of either a specific circumstance (such as a
process, project, or risk event) or the organization as a whole. It's
essentially a ledger to document risks and all information related to
them. A risk map, on the other hand, is developed after a risk register
and incorporates information from the register. A risk map provides a
visual representation of a risk register's data to show which risks are the
highest priority for risk managers and owners.
,●● Relationship between inherent, residual, and optimuml risk
Answer: if the difference between the inherent risk and what the residual
risk will be after a treatment is applied is small, either the risk doesn't
need to be treated or the treatment itself isn't effective enough. The
difference between the residual risk and optimum risk represents how
much further a risk can be reduced
●● Risk Map
Answer: A template depicting the likelihood and potential
impact/consequences of risks
●● Inherent Risk
Answer: The level of risk that would be faced if it were to remain
untreated or no action were to be taken to alter the level of risk
●● Residual Risk
Answer: The level of risk remaining after actions are taken to alter the
level of risk
●● Optimum Risk
Answer: The level of risk that is within an organization's risk appetite
●● Coordination
, Answer: the act of improving efficiency and reducing redundancy by
some combination of arranging, assigning, organizing, or scheduling
activities
●● Collaboration vs. Cooperation
Answer: Collaboration is the act of working together to achieve a shared
objective. Cooperation is the act of working together to achieve
individual objectives instead of a shared objective
●● Predictive techniques, such as decision tree analysis and event tree
analysis:
Answer: assign numerical values to various components related to a risk
and combine them to produce a probability estimate
●● Risk Control
Answer: A conscious act or decision not to act that reduces the
frequency and/or severity of losses or makes losses more predictable
●● Three categories of accident causes:
Answer: poor management, safety policy, and personal or environmental
factors
●● Sequence of Events (Domino Theory)
