11/1/24, 12:25 AM ARM 401 Flashcards | Quizlet
ARM 401ANSWERS SOLVED CORRECTLY TO SCORE A+
-broader in scope, managing all areas of the business, not just hazard risks
-encompasses the analysis and predictability of business processes and
organizational decisions
-mandates the collaboration of internal and external stakeholders to identify, assess,
holistic approach to managing risk
and treat risks
-involves looking at what might be gained from decisions or actions
-can uncover inconsistencies in how a company managers loss retention
-can help orgs better absorb losses
-uncertainties associated with the organization's long-term goals and management
strategic risk decisions
-may carry a greater risk dynamic, positive or negative, that the other categories
operational risk uncertainties associated with the organization's procedures, systems, and policies
financial risk uncertainties associated with the organization's financial activities
today's conception of risk incorporates the idea that taking risks is fundamentally necessary for growth
predictive modeling can empower decision making by uncovering previously imperceptible risk factors
Internet of Things network of devices that sense their environment, process data, and share it instantly
enables orgs to store and share data through wireless internet and networking
cloud computing
services
-facilitates secure transactions without the need for a third party
-protects against cyber threats
blockchain technology
-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 the capture, storage, and analysis of data
management?
-the measure of how two random risk variables will change in relation to each other
covariance
-calculates correlation between the variables
variance -the spread of the data set, or how far apart the numbers are in relation to the mean
1. facilitated workshops
2. Delphi technique
team approaches to risk identification 3. scenario analysis
4. HAZOP
5. SWOT
-provide diverse perspectives on risks
why is it important to take a team-oriented
-can reveal how risks are connected across an org, reducing the likelihood for risks
approach to identifying risks?
to be overlooked
-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
facilitated workshops -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
https://quizlet.com/510745535/arm-401-flash-cards/ 1/10
, 11/1/24, 12:25 AM ARM 401 Flashcards | Quizlet
-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
delphi technique
-benefits: cost-effective, eliminates group bias and encourages honesty by
anonymity
-disadvantages: experts' opinions may be limited to their current thinking on a
subject
-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
scenario analysis be addressed as a whole
-should assemble an internal cross-functional team to get a multidimensional view
-disadvantage: may be limited by the imagination and brainstorming capabilities of
the team selected
-a comprehensive review of a process or system
-a team of subject matter experts and stakeholders identifies the risks associated
HAZOP with a given process and recommends a solution
-primarily used to design complex, scientific systems
-used when virtually all risks must be eliminated
1. subdivides the project or system design into small components
2. reviews each component to identify risks
steps in HAZOP process 3. identifies the cause and potential outcomes for each risk
4. develops a solution for each risk
5. ensures that solutions work and reevaluates as necessary
-team approach that's useful in analyzing a new project or product
-strengths and weaknesses are internal environmental factors
-opportunities and threats are external environmental factors
SWOT Analysis
-a goal is necessary to keep the SOT analysis from becoming too general or failing
to provide actionable info
-concludes with a "go" or "no go" recommendation
-unique qualities of org
-industry it's in
assessing risks of an organization -internal/external factors
-upstream and downstream external factors (upstream: suppliers and manufacturers;
downstream: distribution channels and consumer demands)
1. risk thresholds
2. checklists
3. workshops
4. risk registers and risk maps
traditional risk assessment tools and
5. process flow analysis
techniques
6. audits
7. cause and effect analysis
8. fault tree analysis
9. failure mode and effects analysis
-when an org must decide what it's willing to sacrifice or accept in exchange for
risk thresholds
achieving its goals
-easy to use and communicate known risks to employees with little efforts
checklists
-don't help identify unknown risks
https://quizlet.com/510745535/arm-401-flash-cards/ 2/10
ARM 401ANSWERS SOLVED CORRECTLY TO SCORE A+
-broader in scope, managing all areas of the business, not just hazard risks
-encompasses the analysis and predictability of business processes and
organizational decisions
-mandates the collaboration of internal and external stakeholders to identify, assess,
holistic approach to managing risk
and treat risks
-involves looking at what might be gained from decisions or actions
-can uncover inconsistencies in how a company managers loss retention
-can help orgs better absorb losses
-uncertainties associated with the organization's long-term goals and management
strategic risk decisions
-may carry a greater risk dynamic, positive or negative, that the other categories
operational risk uncertainties associated with the organization's procedures, systems, and policies
financial risk uncertainties associated with the organization's financial activities
today's conception of risk incorporates the idea that taking risks is fundamentally necessary for growth
predictive modeling can empower decision making by uncovering previously imperceptible risk factors
Internet of Things network of devices that sense their environment, process data, and share it instantly
enables orgs to store and share data through wireless internet and networking
cloud computing
services
-facilitates secure transactions without the need for a third party
-protects against cyber threats
blockchain technology
-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 the capture, storage, and analysis of data
management?
-the measure of how two random risk variables will change in relation to each other
covariance
-calculates correlation between the variables
variance -the spread of the data set, or how far apart the numbers are in relation to the mean
1. facilitated workshops
2. Delphi technique
team approaches to risk identification 3. scenario analysis
4. HAZOP
5. SWOT
-provide diverse perspectives on risks
why is it important to take a team-oriented
-can reveal how risks are connected across an org, reducing the likelihood for risks
approach to identifying risks?
to be overlooked
-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
facilitated workshops -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
https://quizlet.com/510745535/arm-401-flash-cards/ 1/10
, 11/1/24, 12:25 AM ARM 401 Flashcards | Quizlet
-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
delphi technique
-benefits: cost-effective, eliminates group bias and encourages honesty by
anonymity
-disadvantages: experts' opinions may be limited to their current thinking on a
subject
-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
scenario analysis be addressed as a whole
-should assemble an internal cross-functional team to get a multidimensional view
-disadvantage: may be limited by the imagination and brainstorming capabilities of
the team selected
-a comprehensive review of a process or system
-a team of subject matter experts and stakeholders identifies the risks associated
HAZOP with a given process and recommends a solution
-primarily used to design complex, scientific systems
-used when virtually all risks must be eliminated
1. subdivides the project or system design into small components
2. reviews each component to identify risks
steps in HAZOP process 3. identifies the cause and potential outcomes for each risk
4. develops a solution for each risk
5. ensures that solutions work and reevaluates as necessary
-team approach that's useful in analyzing a new project or product
-strengths and weaknesses are internal environmental factors
-opportunities and threats are external environmental factors
SWOT Analysis
-a goal is necessary to keep the SOT analysis from becoming too general or failing
to provide actionable info
-concludes with a "go" or "no go" recommendation
-unique qualities of org
-industry it's in
assessing risks of an organization -internal/external factors
-upstream and downstream external factors (upstream: suppliers and manufacturers;
downstream: distribution channels and consumer demands)
1. risk thresholds
2. checklists
3. workshops
4. risk registers and risk maps
traditional risk assessment tools and
5. process flow analysis
techniques
6. audits
7. cause and effect analysis
8. fault tree analysis
9. failure mode and effects analysis
-when an org must decide what it's willing to sacrifice or accept in exchange for
risk thresholds
achieving its goals
-easy to use and communicate known risks to employees with little efforts
checklists
-don't help identify unknown risks
https://quizlet.com/510745535/arm-401-flash-cards/ 2/10
