ARM 400 EXAM AND PRACTICE EXAM
When communicating a decision up the organization's chain of command, consulting with outside
experts can help a risk management professional do which one of the following?
A. Seek feedback from stakeholders
B. Stay focused on the organization's objectives
C. Define the organization's risk appetite
D. Enhance stakeholders' confidence in the process - Answer-D
Which of the following risk management program goals is an essential goal for all public entities?
A. Earning stability
B. Continuity of operations
C. Growth
D. Survival - Answer-B
The traditional definition of risk management reflects the traditional concept of risk as
A. Both positive and negative.
B. Negative.
C. Uncontrollable.
D. Strategic. - Answer-B
During the past year, International Toys has undertaken four capital projects. The company has
renovated and refurbished one of its aging warehouse buildings. It has purchased the most recent
version of its current order processing computer software. It has added two trucks to its fleet of delivery
,vehicles. Lastly, it has purchased a new production machine that will allow it to launch a new product
line. Which one of the following company projects is the most speculative risk?
A. The two new trucks
B. The warehouse refurbishment
C. The software upgrade
D. The new production machine - Answer-D
Which one of the following statements is true regarding the basic measures that apply to risk
management?
A. Consequences measure the degree to which an occurrence could positively or negatively affect an
organization.
B. Hedging is a risk management strategy that can reduce the risk of correlation.
C. Risk increases as volatility decreases.
D. Longer time horizons are generally less risky that shorter ones. - Answer-A
Which one of the following provides a measure of the maximum potential damage associated with an
occurrence?
A. Exposure
B. Duration
C. Underwriting risk
D. Maximum probable loss - Answer-A
Samuel was recently hired as a risk management professional for Parker Property Management. He has
been asked by senior management to review the organization's current insurance policies to make sure
that the organization is adequately protected, and also see if there are any opportunities to save on the
premiums. Samuel must do which one of the following through internal communication before he will
be able to complete this task?
A. Determine the organization's risk appetite
B. Identify all of the risks that the organization faces
,C. Earn the confidence of the organization's board of directors
D. Become familiar with industry regulations - Answer-A
Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out a need for many
organizations to evaluate and manage their
A. Supply-chain risk.
B. Derivative risk.
C. Compliance risk.
D. Political risk. - Answer-A
Risk management professionals must collaborate with data analysts during which two steps of the risk
management process?
A. Treat risks and monitor risk treatments
B. Scan the environment and analyze risks
C. Analyze risks and monitor risk treatments
D. Identify risks and treat risks - Answer-C
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
Carla, the risk manager, was asked by senior management to deliver a presentation on cyber risk at an
all employees meeting. Even though she was only allotted 30 minutes for her presentation, Carla felt
that cyber risk was a very real risk for the corporation and she wanted employees to leave with some
fear of it. She wanted to provide employees with as much technical information as possible, and
, familiarize them with all of the important jargon. Less than 20 minutes into her presentation, Carla could
tell that many of the employees were not paying any attention to her presentation. Which one of the
following steps in the communication process had Carla failed to consider?
A. Pay attention to your body language
B. Ask for feedback
C. Analyze your audience
D. Set a clear communication objective - Answer-C
Before speaking with a group or individual, the speaker should think about what he or she wants the
other person(s) to do as a result of the conversation. Which one of the following steps in the
communication process does the speaker complete by doing this?
A. Deliver a message the recipient(s) want to hear
B. Set aside judgement
C. Set a clear communication objective
D. Analyze your audience - Answer-C
Which one of the following risk management objectives is critical for a manufacturer seeking new capital
from investors, stockholders, and creditors?
A. Anticipate and recognize emerging risks
B. Social responsibility
C. Reduce the deterrent effects of hazard risks
D. Eliminate downside risk - Answer-C
Which one of the following data capture tools has led to an explosion of risk management innovation by
allowing smart products to transmit data to each other and to central hubs?
A. Blockchain
B. Cloud computing
C. Internet of Things
When communicating a decision up the organization's chain of command, consulting with outside
experts can help a risk management professional do which one of the following?
A. Seek feedback from stakeholders
B. Stay focused on the organization's objectives
C. Define the organization's risk appetite
D. Enhance stakeholders' confidence in the process - Answer-D
Which of the following risk management program goals is an essential goal for all public entities?
A. Earning stability
B. Continuity of operations
C. Growth
D. Survival - Answer-B
The traditional definition of risk management reflects the traditional concept of risk as
A. Both positive and negative.
B. Negative.
C. Uncontrollable.
D. Strategic. - Answer-B
During the past year, International Toys has undertaken four capital projects. The company has
renovated and refurbished one of its aging warehouse buildings. It has purchased the most recent
version of its current order processing computer software. It has added two trucks to its fleet of delivery
,vehicles. Lastly, it has purchased a new production machine that will allow it to launch a new product
line. Which one of the following company projects is the most speculative risk?
A. The two new trucks
B. The warehouse refurbishment
C. The software upgrade
D. The new production machine - Answer-D
Which one of the following statements is true regarding the basic measures that apply to risk
management?
A. Consequences measure the degree to which an occurrence could positively or negatively affect an
organization.
B. Hedging is a risk management strategy that can reduce the risk of correlation.
C. Risk increases as volatility decreases.
D. Longer time horizons are generally less risky that shorter ones. - Answer-A
Which one of the following provides a measure of the maximum potential damage associated with an
occurrence?
A. Exposure
B. Duration
C. Underwriting risk
D. Maximum probable loss - Answer-A
Samuel was recently hired as a risk management professional for Parker Property Management. He has
been asked by senior management to review the organization's current insurance policies to make sure
that the organization is adequately protected, and also see if there are any opportunities to save on the
premiums. Samuel must do which one of the following through internal communication before he will
be able to complete this task?
A. Determine the organization's risk appetite
B. Identify all of the risks that the organization faces
,C. Earn the confidence of the organization's board of directors
D. Become familiar with industry regulations - Answer-A
Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out a need for many
organizations to evaluate and manage their
A. Supply-chain risk.
B. Derivative risk.
C. Compliance risk.
D. Political risk. - Answer-A
Risk management professionals must collaborate with data analysts during which two steps of the risk
management process?
A. Treat risks and monitor risk treatments
B. Scan the environment and analyze risks
C. Analyze risks and monitor risk treatments
D. Identify risks and treat risks - Answer-C
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
Carla, the risk manager, was asked by senior management to deliver a presentation on cyber risk at an
all employees meeting. Even though she was only allotted 30 minutes for her presentation, Carla felt
that cyber risk was a very real risk for the corporation and she wanted employees to leave with some
fear of it. She wanted to provide employees with as much technical information as possible, and
, familiarize them with all of the important jargon. Less than 20 minutes into her presentation, Carla could
tell that many of the employees were not paying any attention to her presentation. Which one of the
following steps in the communication process had Carla failed to consider?
A. Pay attention to your body language
B. Ask for feedback
C. Analyze your audience
D. Set a clear communication objective - Answer-C
Before speaking with a group or individual, the speaker should think about what he or she wants the
other person(s) to do as a result of the conversation. Which one of the following steps in the
communication process does the speaker complete by doing this?
A. Deliver a message the recipient(s) want to hear
B. Set aside judgement
C. Set a clear communication objective
D. Analyze your audience - Answer-C
Which one of the following risk management objectives is critical for a manufacturer seeking new capital
from investors, stockholders, and creditors?
A. Anticipate and recognize emerging risks
B. Social responsibility
C. Reduce the deterrent effects of hazard risks
D. Eliminate downside risk - Answer-C
Which one of the following data capture tools has led to an explosion of risk management innovation by
allowing smart products to transmit data to each other and to central hubs?
A. Blockchain
B. Cloud computing
C. Internet of Things
