ARM 400 NEWEST 2025 ACTUAL EXAM COMPLETE 200 QUESTIONS AND CORRECT
DETAILED ANSWERS VERIFIED CHEAT SHEET OF NURSING
A business impact analysis (BIA) should identify the points in time when the interruption would have the
greatest impact, what the operational impact would be, and
A. Who should be on the recovery team.
B. Whether the exposures are external, internal, or project.
C. What continuity strategy to use.
D. What the financial impact would be. ANSWER>> D
A corporate board of director's chair person is elected by
A. The board of directors.
B. The shareholders.
C. Executive management.
D. Proxies.ANSWER>> A
A data governance committee (DGC)
A. Is cross-functional.
B. Cleanses big data.
C. Reports to risk management.
D. Is comprised of IT architects. ANSWER>> A
A holistic approach that allows companies to better withstand short-term shocks and help ensure long-term
business viability is known as
A. Organizational resiliency.
B. Business process management.
C. Strategic redeployment plan.
D. Preparedness planning ANSWER>> A
A municipal water plant installed water flow sensors and water pressure sensors on the water pipes leaving
the plant. The sensors make sure water is flowing properly and that there are no leaks or clogs which could
produce a loss. These types of sensors are
A. Thermal sensors.
B. Mechanical sensors.
C. Biochemical sensors.
D. Radiant sensors. ANSWER>> B
A privacy impact assessment (PIA) is
A. A tool used to identify and assess privacy risks.
B. An example of metadata that defines key data attributes.
C. A collaborative tool that facilitates workflows.
, D. Proprietary software used to detect malware. ANSWER>> A
A risk management professional is identifying the organization's key stakeholders as part of the enterprise risk
management program. Which one of the following would be considered an internal stakeholder?
A. Unions
B. Suppliers
C. General public
D. Stockholders ANSWER>> D
A speaker imparts information in verbal communications by
A. Using appropriate facial expressions and gestures while other parties express their opinions and
concerns.
B. Expressing facts and emotions quickly, inviting written questions for discussion at a future session.
C. Having good listening skills and expressing facts and emotions through words and sometimes visual
displays.
D. Listening and verbally responding with anecdotes of prior meetings, leveraging humor as opposed to
facts for disc ANSWER>> C
According to the law of large numbers, as the number of exposure units insured increases,
A. Fewer losses are expected to occur.
B. The size of the average loss declines.
C. The relative accuracy of predictions about future losses increases.
D. The probability of an underwriting loss increases. ANSWER>> C
After opening its third store, Shoehorn Shoes decided to purchase new inventory tracking software for all of
its stores. Which one of the following external or internal environments does this decision relate to?
A. Economic environment
B. Physical environment
C. Product environment
D. Operations environment ANSWER>> D
After opening its third store, Shoehorn Shoes decided to purchase new inventory tracking software for all of
its stores. Which one of the following external or internal environments does this decision relate to?
A. Operations environment
B. Physical environment
C. Economic environment
D. Product environment ANSWER>> A
Aligning risks with the organization's risk appetite defines
A. Social responsibility.
B. Tolerable uncertainty.
C. Compliance.
D. Value at risk. ANSWER>> B
All of the following are true regarding the composition of boards of directors, EXCEPT:
A. Corporate boards are uniform in size with 13 directors.
B. Boards include both inside directors and outside directors.
C. Directors elect the chairman of the board.
D. Outside directors serve on the compensation committee. ANSWER>> A
All of the following are true regarding the Federal Sentencing Guidelines, EXCEPT:
A. They can be used by federal courts.
B. They are mandatory.
C. They require an organization to have written standards and procedures.
, D. They establish minimum components for an effective compliance program. ANSWER>> B
AMRM Insurance Company sells insurance in Virginia, North Carolina, South Carolina, and Georgia. The
company has compiled a policyowner data base that can be used to send text messages when hurricanes
approach. The company provides early warnings, storm updates from the National Weather Service, and
hurricane safety measures. The company credits the system with reduced hurricane claims. The use of the
texting system is an example of
A. Preventive analytics.
B. Artificial intelligence.
C. Sensor ANSWER>> A
An analysis of an organization's external environments will help identify its
A. Opportunities and threats.
B. Culture and values.
C. Strengths and weaknesses.
D. Products and services. ANSWER>> A
An auditor identifies risks under the risk-based approach by
A. Reviewing the organization, department by department to determine if the controls overlap asking, "Is
the redundancy needed?"
B. Reviewing prior audits, comparing results and asking, and "Has the control environment changed?"
C. Looking at each objective, testing each control by asking, "Does this seem appropriate?"
D. Looking at each objective and its controls identifying risks by asking, "What might go wrong?"
ANSWER>> D
An independent auditor has been given the task of evaluating internal controls at Westside Company
(Westside). The auditor has determined that Westside's board of directors has endorsed a framework
requiring management to have documented internal reporting controls to ensure efficient operations, accuracy
of financial statements, and compliance with regulations. The framework is applied at the entity and
divisional levels, but not the operating unit or functional levels. The program is new so it ANSWER>> C
An organization evaluates key stakeholders' attitude toward risk in order to
A. Understand what risks are acceptable and to develop an effective enterprise-wide risk management
program.
B. Understand acceptable risks and gauge its ability to attract new shareholders.
C. Understand acceptable risks and gauge its ability to raise capital.
D. Understand the risk appetite in order to determine what information is disseminated.
ANSWER>> A
An organization evaluates the social environment as part of its enterprise risk management (ERM) because
A. Society is in a constant state of change.
B. New sales or production methodology can affect consumers.
C. Society norms and values influence how an organization manages its risks. ANSWER>> C
An organization has established a key performance indicator to "reduce employee injuries by 6%." Which one
of the following would indicate a low risk tolerance for this KPI?
A. Reduce employee injuries by 2%
B. Reduce employee injuries by 4%
C. Reduce employee injuries by 5 to 6%
D. Employee injury rate remains unchanged ANSWER>> C
An organization must meet the standard of care that it owes to others in order to ensure that
A. Legal obligations are satisfied.
B. Post-loss goals are in place.
, C. Operations are efficient.
D. Contracts are not breached. ANSWER>> A
An organization's goals and objectives are met by establishing and attaining measurable standards for the
many activities it pursues. Which one of the following statements is correct with respect to those standards?
A. A key performance indicator (KPI) answers the question, "What will make our organization a
success?"
B. Generally, an organization's risk tolerance has little impact on its critical success factors (CSFs) and
key performance indicators (KPIs).
C. Organizations with key performance ANSWER>> D
As a market force to help align manager and shareholder interests, takeover threats are
A. Only effective for directors and officers and have no effect on managers.
B. Less likely now than in the past because of statutory changes.
C. Only effective when the employment market for managers is increasing.
D. Easily and quickly implemented and are highly effective. ANSWER>> B
As a result of a risk assessment, Medford Factory identified several exposures that could interrupt its
operations. Which one of the following would be categorized as an external exposure?
A. A widespread power outage
B. A fire breaking out in the warehouse
C. A poorly designed product that needs to be recalled
D. An IT server failure ANSWER>> A
Asking a question such as "How do you think this will work out?" can help a speaker do which one of the
following?
A. Request feedback and determine if the message has been understood
B. Gain the support of executives and decision makers
C. Build trust among a diverse group of individuals
D. Deliver a message that recipients don't want to hear ANSWER>> A
Autonomous Vehicle Applications (AVA) is a start-up company that develops safety technologies that can be
sold to companies that are producing autonomous vehicles. One technology AVA is developing allows an
autonomous vehicle to detect, extract, and analyze images; and then to respond to the images. For example,
the technology would detect a presence in a crosswalk, extract the image, and a computer would analyze the
image. When the image was determined to be a human being, the vehicle would slo ANSWER>> B
Based on Basel III principles, which one of the following groups should take the lead in establishing a strong
risk management culture?
A. Employees
B. Board of directors
C. Senior management
D. Risk managers ANSWER>> B
BD Company has made widgets for over 79 years using the same production techniques for fear of the huge
costs from potential consumer lawsuits if production is changed and product quality suffers. With respect to
its risk attitude, this organization would be classified as
A. Risk seeking.
B. Risk naïve.
C. Risk avoiding.
D. Risk optimizing. ANSWER>> C
Be-Ne-Lux Insurance is an insurer operating in Belgium, the Netherlands, and Luxembourg. Be-Ne-Lux is
DETAILED ANSWERS VERIFIED CHEAT SHEET OF NURSING
A business impact analysis (BIA) should identify the points in time when the interruption would have the
greatest impact, what the operational impact would be, and
A. Who should be on the recovery team.
B. Whether the exposures are external, internal, or project.
C. What continuity strategy to use.
D. What the financial impact would be. ANSWER>> D
A corporate board of director's chair person is elected by
A. The board of directors.
B. The shareholders.
C. Executive management.
D. Proxies.ANSWER>> A
A data governance committee (DGC)
A. Is cross-functional.
B. Cleanses big data.
C. Reports to risk management.
D. Is comprised of IT architects. ANSWER>> A
A holistic approach that allows companies to better withstand short-term shocks and help ensure long-term
business viability is known as
A. Organizational resiliency.
B. Business process management.
C. Strategic redeployment plan.
D. Preparedness planning ANSWER>> A
A municipal water plant installed water flow sensors and water pressure sensors on the water pipes leaving
the plant. The sensors make sure water is flowing properly and that there are no leaks or clogs which could
produce a loss. These types of sensors are
A. Thermal sensors.
B. Mechanical sensors.
C. Biochemical sensors.
D. Radiant sensors. ANSWER>> B
A privacy impact assessment (PIA) is
A. A tool used to identify and assess privacy risks.
B. An example of metadata that defines key data attributes.
C. A collaborative tool that facilitates workflows.
, D. Proprietary software used to detect malware. ANSWER>> A
A risk management professional is identifying the organization's key stakeholders as part of the enterprise risk
management program. Which one of the following would be considered an internal stakeholder?
A. Unions
B. Suppliers
C. General public
D. Stockholders ANSWER>> D
A speaker imparts information in verbal communications by
A. Using appropriate facial expressions and gestures while other parties express their opinions and
concerns.
B. Expressing facts and emotions quickly, inviting written questions for discussion at a future session.
C. Having good listening skills and expressing facts and emotions through words and sometimes visual
displays.
D. Listening and verbally responding with anecdotes of prior meetings, leveraging humor as opposed to
facts for disc ANSWER>> C
According to the law of large numbers, as the number of exposure units insured increases,
A. Fewer losses are expected to occur.
B. The size of the average loss declines.
C. The relative accuracy of predictions about future losses increases.
D. The probability of an underwriting loss increases. ANSWER>> C
After opening its third store, Shoehorn Shoes decided to purchase new inventory tracking software for all of
its stores. Which one of the following external or internal environments does this decision relate to?
A. Economic environment
B. Physical environment
C. Product environment
D. Operations environment ANSWER>> D
After opening its third store, Shoehorn Shoes decided to purchase new inventory tracking software for all of
its stores. Which one of the following external or internal environments does this decision relate to?
A. Operations environment
B. Physical environment
C. Economic environment
D. Product environment ANSWER>> A
Aligning risks with the organization's risk appetite defines
A. Social responsibility.
B. Tolerable uncertainty.
C. Compliance.
D. Value at risk. ANSWER>> B
All of the following are true regarding the composition of boards of directors, EXCEPT:
A. Corporate boards are uniform in size with 13 directors.
B. Boards include both inside directors and outside directors.
C. Directors elect the chairman of the board.
D. Outside directors serve on the compensation committee. ANSWER>> A
All of the following are true regarding the Federal Sentencing Guidelines, EXCEPT:
A. They can be used by federal courts.
B. They are mandatory.
C. They require an organization to have written standards and procedures.
, D. They establish minimum components for an effective compliance program. ANSWER>> B
AMRM Insurance Company sells insurance in Virginia, North Carolina, South Carolina, and Georgia. The
company has compiled a policyowner data base that can be used to send text messages when hurricanes
approach. The company provides early warnings, storm updates from the National Weather Service, and
hurricane safety measures. The company credits the system with reduced hurricane claims. The use of the
texting system is an example of
A. Preventive analytics.
B. Artificial intelligence.
C. Sensor ANSWER>> A
An analysis of an organization's external environments will help identify its
A. Opportunities and threats.
B. Culture and values.
C. Strengths and weaknesses.
D. Products and services. ANSWER>> A
An auditor identifies risks under the risk-based approach by
A. Reviewing the organization, department by department to determine if the controls overlap asking, "Is
the redundancy needed?"
B. Reviewing prior audits, comparing results and asking, and "Has the control environment changed?"
C. Looking at each objective, testing each control by asking, "Does this seem appropriate?"
D. Looking at each objective and its controls identifying risks by asking, "What might go wrong?"
ANSWER>> D
An independent auditor has been given the task of evaluating internal controls at Westside Company
(Westside). The auditor has determined that Westside's board of directors has endorsed a framework
requiring management to have documented internal reporting controls to ensure efficient operations, accuracy
of financial statements, and compliance with regulations. The framework is applied at the entity and
divisional levels, but not the operating unit or functional levels. The program is new so it ANSWER>> C
An organization evaluates key stakeholders' attitude toward risk in order to
A. Understand what risks are acceptable and to develop an effective enterprise-wide risk management
program.
B. Understand acceptable risks and gauge its ability to attract new shareholders.
C. Understand acceptable risks and gauge its ability to raise capital.
D. Understand the risk appetite in order to determine what information is disseminated.
ANSWER>> A
An organization evaluates the social environment as part of its enterprise risk management (ERM) because
A. Society is in a constant state of change.
B. New sales or production methodology can affect consumers.
C. Society norms and values influence how an organization manages its risks. ANSWER>> C
An organization has established a key performance indicator to "reduce employee injuries by 6%." Which one
of the following would indicate a low risk tolerance for this KPI?
A. Reduce employee injuries by 2%
B. Reduce employee injuries by 4%
C. Reduce employee injuries by 5 to 6%
D. Employee injury rate remains unchanged ANSWER>> C
An organization must meet the standard of care that it owes to others in order to ensure that
A. Legal obligations are satisfied.
B. Post-loss goals are in place.
, C. Operations are efficient.
D. Contracts are not breached. ANSWER>> A
An organization's goals and objectives are met by establishing and attaining measurable standards for the
many activities it pursues. Which one of the following statements is correct with respect to those standards?
A. A key performance indicator (KPI) answers the question, "What will make our organization a
success?"
B. Generally, an organization's risk tolerance has little impact on its critical success factors (CSFs) and
key performance indicators (KPIs).
C. Organizations with key performance ANSWER>> D
As a market force to help align manager and shareholder interests, takeover threats are
A. Only effective for directors and officers and have no effect on managers.
B. Less likely now than in the past because of statutory changes.
C. Only effective when the employment market for managers is increasing.
D. Easily and quickly implemented and are highly effective. ANSWER>> B
As a result of a risk assessment, Medford Factory identified several exposures that could interrupt its
operations. Which one of the following would be categorized as an external exposure?
A. A widespread power outage
B. A fire breaking out in the warehouse
C. A poorly designed product that needs to be recalled
D. An IT server failure ANSWER>> A
Asking a question such as "How do you think this will work out?" can help a speaker do which one of the
following?
A. Request feedback and determine if the message has been understood
B. Gain the support of executives and decision makers
C. Build trust among a diverse group of individuals
D. Deliver a message that recipients don't want to hear ANSWER>> A
Autonomous Vehicle Applications (AVA) is a start-up company that develops safety technologies that can be
sold to companies that are producing autonomous vehicles. One technology AVA is developing allows an
autonomous vehicle to detect, extract, and analyze images; and then to respond to the images. For example,
the technology would detect a presence in a crosswalk, extract the image, and a computer would analyze the
image. When the image was determined to be a human being, the vehicle would slo ANSWER>> B
Based on Basel III principles, which one of the following groups should take the lead in establishing a strong
risk management culture?
A. Employees
B. Board of directors
C. Senior management
D. Risk managers ANSWER>> B
BD Company has made widgets for over 79 years using the same production techniques for fear of the huge
costs from potential consumer lawsuits if production is changed and product quality suffers. With respect to
its risk attitude, this organization would be classified as
A. Risk seeking.
B. Risk naïve.
C. Risk avoiding.
D. Risk optimizing. ANSWER>> C
Be-Ne-Lux Insurance is an insurer operating in Belgium, the Netherlands, and Luxembourg. Be-Ne-Lux is
