ARM 401 PRACTICE EXAM UPDATED ACTUAL Questions and
CORRECT Answers
1. A process in which managers perform an annual self C. A control risk self as-
audit of the level of confidence they have in the risk sessment
management culture, practice, and procedures of their
area is called
A. An underwriting audit
B. A Risk Management Review
C. A control risk self-assessment
D. A reunderwriting process
2. ABC Life Insurance Company is concerned about the A. Liquidity Risk
number of withdrawals or surrendered policies in
a short amount of time causing a need for large
amounts of cash. This concern is considered:
A. Liquidity Risk
B. Inherent Risk
C. Residual Risk
3. Which one of the following statements is true regard- B. the sum of probabili-
ing probability distributions in forecasting? ties in a distribution must
A. Probability distributions do not include every possi- equal 1.0
ble outcome
B. The sum of probabilities in a distribution must equal
1.0
C. A properly constructed probability distribution con-
tains outcomes that are simultaneously redundant
and restricted
D. Theoretical probabilities are unsuited to creating
probability distributions because of their reliance on
actual experience
4. Which one of the following Internet of Things Devices
has greatly influenced driver and vehicle safety?
, D. Telematics
CORRECT Answers
1. A process in which managers perform an annual self C. A control risk self as-
audit of the level of confidence they have in the risk sessment
management culture, practice, and procedures of their
area is called
A. An underwriting audit
B. A Risk Management Review
C. A control risk self-assessment
D. A reunderwriting process
2. ABC Life Insurance Company is concerned about the A. Liquidity Risk
number of withdrawals or surrendered policies in
a short amount of time causing a need for large
amounts of cash. This concern is considered:
A. Liquidity Risk
B. Inherent Risk
C. Residual Risk
3. Which one of the following statements is true regard- B. the sum of probabili-
ing probability distributions in forecasting? ties in a distribution must
A. Probability distributions do not include every possi- equal 1.0
ble outcome
B. The sum of probabilities in a distribution must equal
1.0
C. A properly constructed probability distribution con-
tains outcomes that are simultaneously redundant
and restricted
D. Theoretical probabilities are unsuited to creating
probability distributions because of their reliance on
actual experience
4. Which one of the following Internet of Things Devices
has greatly influenced driver and vehicle safety?
, D. Telematics
