ARM 400 - Segment A - Chapters 1, 2, & 3
Fundamental Concepts, Risk Management Today,
Environment and Culture Exam | Questions with
100% Correct Answers | Verified | Latest Update
2026/2027
Save
Terms in this set (107)
Sets of data that are too large to be Big Data
gathered and analyzed by traditional
methods
An innovative item that uses sensors; Smart Product
wireless sensor networks; and data
collection, transmission, and analysis
to further enable the item to be
faster, more useful, or otherwise
improved
A network of objects that transmit Internet of Things (IoT)
data to and from each other without
human interaction
Information, technology, and storage Cloud Computing
services contractually provided from
remote locations, through the
internet or another network, without
a direct server connection.
,A distributed digital ledger that Blockchain
facilitates secure transactions
without the need for a third party
Text Mining Obtaining information through language
recognition
The use of technological devices in Telematics
vehicles with wireless communication
and GPS tracking that transmit data
to businesses or government
agencies; some return information
for the driver
Amount of risk an organization is Risk Appetite
willing to take on in order to achieve
an anticipated result or return
A technique to quantify financial risk Value at risk (VaR)
by measuring the likelihood of losing
more than a specific dollar amount
over a specific period of time
the total cost incurred by an cost of risk
organization because of the
possibility of accidental loss
any condition that presents a Exposure
possibility of gain or loss, whether or
not an actual loss occurs
Frequent fluctuations, such as in the Volatility
price of an asset
,A qualitative estimate of the certainty Likelihood
with which the outcome of a specific
event can be predicted
the effects, positive or negative, of consequences
an occurrence
Estimated duration Time Horizon
A relationship between variables correlation
a chance of loss or no loss, but no pure risk
chance of gain
a chance of loss, no loss, or gain Speculative risk
The risk that customers or other Credit Risk
creditors will fail to make promised
payments as they come due
the perceived amount of risk based Subjective risk
on an individual's or organization's
opinion
the measurable variation in uncertain Objective risk
outcomes base on facts and data
A risk that affects only some Diversifiable Risk
individuals, businesses or small
groups
Not highly correlated - gains and
losses tend to occur randomly
, The potential for a major disruption Systemic Risk
in the function of an entire market or
financial system
Uncertainty about an investment's Market Risk
future value because of potential
changes in the market for that type
of investment
The risk that an asset cannot be sold Liquidity Risk
on short notice without incurring a
loss
What are the basic risk measures? 1. exposure
2. volatility
3. Likelihood
4. Consequences
5. Time Horizon
6. Correlation
Name the classifications of risk Pure vs. Speculative
Subjective vs. Objective
Diversifiable vs. Nondiversifiable
Quadrants of risk (hazard, operational, financial,
and strategic)
What two factors highly affect Price risk & credit risk
speculative risk?
Fundamental Concepts, Risk Management Today,
Environment and Culture Exam | Questions with
100% Correct Answers | Verified | Latest Update
2026/2027
Save
Terms in this set (107)
Sets of data that are too large to be Big Data
gathered and analyzed by traditional
methods
An innovative item that uses sensors; Smart Product
wireless sensor networks; and data
collection, transmission, and analysis
to further enable the item to be
faster, more useful, or otherwise
improved
A network of objects that transmit Internet of Things (IoT)
data to and from each other without
human interaction
Information, technology, and storage Cloud Computing
services contractually provided from
remote locations, through the
internet or another network, without
a direct server connection.
,A distributed digital ledger that Blockchain
facilitates secure transactions
without the need for a third party
Text Mining Obtaining information through language
recognition
The use of technological devices in Telematics
vehicles with wireless communication
and GPS tracking that transmit data
to businesses or government
agencies; some return information
for the driver
Amount of risk an organization is Risk Appetite
willing to take on in order to achieve
an anticipated result or return
A technique to quantify financial risk Value at risk (VaR)
by measuring the likelihood of losing
more than a specific dollar amount
over a specific period of time
the total cost incurred by an cost of risk
organization because of the
possibility of accidental loss
any condition that presents a Exposure
possibility of gain or loss, whether or
not an actual loss occurs
Frequent fluctuations, such as in the Volatility
price of an asset
,A qualitative estimate of the certainty Likelihood
with which the outcome of a specific
event can be predicted
the effects, positive or negative, of consequences
an occurrence
Estimated duration Time Horizon
A relationship between variables correlation
a chance of loss or no loss, but no pure risk
chance of gain
a chance of loss, no loss, or gain Speculative risk
The risk that customers or other Credit Risk
creditors will fail to make promised
payments as they come due
the perceived amount of risk based Subjective risk
on an individual's or organization's
opinion
the measurable variation in uncertain Objective risk
outcomes base on facts and data
A risk that affects only some Diversifiable Risk
individuals, businesses or small
groups
Not highly correlated - gains and
losses tend to occur randomly
, The potential for a major disruption Systemic Risk
in the function of an entire market or
financial system
Uncertainty about an investment's Market Risk
future value because of potential
changes in the market for that type
of investment
The risk that an asset cannot be sold Liquidity Risk
on short notice without incurring a
loss
What are the basic risk measures? 1. exposure
2. volatility
3. Likelihood
4. Consequences
5. Time Horizon
6. Correlation
Name the classifications of risk Pure vs. Speculative
Subjective vs. Objective
Diversifiable vs. Nondiversifiable
Quadrants of risk (hazard, operational, financial,
and strategic)
What two factors highly affect Price risk & credit risk
speculative risk?
