ARM 400 EXAM |ACTUAL QUESTIONS AND
VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
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
CORRECT ANSWER
D
Question 2
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
CORRECT ANSWER
B
Question 3
The traditional definition of risk management reflects the traditional concept of risk as
1
,A. Both positive and negative.
B. Negative.
C. Uncontrollable.
D. Strategic.
CORRECT ANSWER
B
Question 4
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 tr
CORRECT ANSWER
D
Question 5
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.
CORRECT ANSWER
A
2
,Question 6
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
CORRECT ANSWER
A
Question 7
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
CORRECT ANSWER
A
Question 8
Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out a
need for many organizations to evaluate and manage their
3
, A. Supply-chain risk.
B. Derivative risk.
C. Compliance risk.
D. Political risk.
CORRECT ANSWER
A
Question 9
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
CORRECT ANSWER
C
Question 10
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
CORRECT ANSWER
A
4
VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
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
CORRECT ANSWER
D
Question 2
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
CORRECT ANSWER
B
Question 3
The traditional definition of risk management reflects the traditional concept of risk as
1
,A. Both positive and negative.
B. Negative.
C. Uncontrollable.
D. Strategic.
CORRECT ANSWER
B
Question 4
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 tr
CORRECT ANSWER
D
Question 5
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.
CORRECT ANSWER
A
2
,Question 6
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
CORRECT ANSWER
A
Question 7
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
CORRECT ANSWER
A
Question 8
Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out a
need for many organizations to evaluate and manage their
3
, A. Supply-chain risk.
B. Derivative risk.
C. Compliance risk.
D. Political risk.
CORRECT ANSWER
A
Question 9
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
CORRECT ANSWER
C
Question 10
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
CORRECT ANSWER
A
4
