ARM 400 Concepts Exam Questions with Correct Answers

Benefits of risk management (6) Correct Answer 1. tolerable uncertainty 2. profitability and growth 3. legal and regulatory compliance 4. social responsibility 5. reduced cost of risk 6. reduced deterrent effects of hazard risk Basic risk measures (6) Correct Answer 1. exposure 2. volatility 3. likelihood 4. consequences 5. time horizon 6. correlation 3 pairs of risk classifications Correct Answer 1. pure-speculative 2. subjective-objective 3. diversifiable-nondiversifiable 4 risk quadrants Correct Answer hazard, operational, financial, strategic RM cycle Correct Answer scan-identify-analyze-treat-monitor+review (communicate + collaborate) 4 risk environments Correct Answer physical social legal economic 3 bases of organizational culture Correct Answer beliefs values behaviors 4 types of corporate culture Correct Answer hierarchy market clan adhocracy