ARM 400 PRACTICE QUESTIONS AND
DETAILED SOLUTIONS
◉ Strategic Redeployment Plan.
Answer: a comprehensive plan for resiliency after a severe
disruption
◉ Business Impact Analysis (BIA).
Answer: assesses identified risks and determines their overall effect
on the firm's ability to meet its key objectives
◉ Risk Managers.
Answer: identify, evaluate and treat risks within stated risk appetites
and risk tolerances. The risk management team monitors and
reports on risk management activities.
◉ Privacy Impact Assessment (PIA).
Answer: defines what data is private and identifies the risk to that
data.
◉ 4 Data Governance Goals.
Answer: Accuracy; Validity; Timeliness; Completeness
,◉ Board of Directors.
Answer: sets the firms risk appetite and stays aware of significant
risks. They also determine the amount and types of risk the firm will
pursue, retain, reduce and avoid.
◉ Corporate Governance Codes.
Answer: developed by governments and business oversight
organisations to provide broad guidance to corporate boards and
management.
◉ 3 Most Important Corporate Board Committees.
Answer: Audit Committee; Compensation Committee;
Nominations/Corporate Governance Committee
◉ Monitoring Costs.
Answer: the costs of overseeing corporate decision makers
(shareholders bear most of these costs)
◉ Bonding Costs.
Answer: are the managers costs of demonstrating that they are
serving the shareholders interests (managers bear most of these
costs)
, ◉ Incentive Alignment Costs.
Answer: costs of lost value because managers interest of never
perfectly aligned with shareholders' interest (shareholders bear
most of these costs)
◉ Hierarchy Culture.
Answer: well defined decision making authority with standardized
rules and procedures
◉ Market Culture.
Answer: Focuses on outward relationships and prioritizes
profitability, bottom-line results and stable customer bases
◉ Clan Culture.
Answer: Views the firm as a family, emphasizes teamwork, and
encourages workers to suggest improvements to processes
◉ Adhocracy Culture.
Answer: Emphasizes adaptability and shifts authority as needed
◉ Risk-Seeking (Naive).
Answer: This attitude anticipates positive results, often
underemphasising a risk's potential negative effects
DETAILED SOLUTIONS
◉ Strategic Redeployment Plan.
Answer: a comprehensive plan for resiliency after a severe
disruption
◉ Business Impact Analysis (BIA).
Answer: assesses identified risks and determines their overall effect
on the firm's ability to meet its key objectives
◉ Risk Managers.
Answer: identify, evaluate and treat risks within stated risk appetites
and risk tolerances. The risk management team monitors and
reports on risk management activities.
◉ Privacy Impact Assessment (PIA).
Answer: defines what data is private and identifies the risk to that
data.
◉ 4 Data Governance Goals.
Answer: Accuracy; Validity; Timeliness; Completeness
,◉ Board of Directors.
Answer: sets the firms risk appetite and stays aware of significant
risks. They also determine the amount and types of risk the firm will
pursue, retain, reduce and avoid.
◉ Corporate Governance Codes.
Answer: developed by governments and business oversight
organisations to provide broad guidance to corporate boards and
management.
◉ 3 Most Important Corporate Board Committees.
Answer: Audit Committee; Compensation Committee;
Nominations/Corporate Governance Committee
◉ Monitoring Costs.
Answer: the costs of overseeing corporate decision makers
(shareholders bear most of these costs)
◉ Bonding Costs.
Answer: are the managers costs of demonstrating that they are
serving the shareholders interests (managers bear most of these
costs)
, ◉ Incentive Alignment Costs.
Answer: costs of lost value because managers interest of never
perfectly aligned with shareholders' interest (shareholders bear
most of these costs)
◉ Hierarchy Culture.
Answer: well defined decision making authority with standardized
rules and procedures
◉ Market Culture.
Answer: Focuses on outward relationships and prioritizes
profitability, bottom-line results and stable customer bases
◉ Clan Culture.
Answer: Views the firm as a family, emphasizes teamwork, and
encourages workers to suggest improvements to processes
◉ Adhocracy Culture.
Answer: Emphasizes adaptability and shifts authority as needed
◉ Risk-Seeking (Naive).
Answer: This attitude anticipates positive results, often
underemphasising a risk's potential negative effects
