ARM 402 Exam Questions and Answers
with Verified Solutions | Latest Updated
2026
The selection and Risk treatment
implementation of actions to
help manage or mitigate a
risk.
The level of risk remaining Residual risk
after actions are taken to alter
the level of risk.
A risk control technique that Avoidance
involves ceasing or never
undertaking an activity so that
the possibility of a future loss
occurring from that activity is
eliminated.
A risk control technique that Loss prevention
reduces the frequency of a
particular loss.
A risk control technique that Loss reduction
reduces the severity of a
particular loss
The shifting of risk from one Risk transfer
individual or organization to
another.
,A risk financing technique that Retention
involves assumption of risk in
which gains and losses are
retained within the
organization.
A risk management technique Risk financing
that includes steps to pay for
or transfer the cost of losses.
A network of objects that Internet of Things (IoT)
transmit data to computers.
The use of technological Telematics
devices in vehicles with
wireless communication and
GPS tracking that transmit
data to businesses or
government agencies; some
return information for the
driver.
Artificial intelligence in which Machine learning
computers continually teach
themselves to make better
decisions based on previous
results and new data.
A financial transaction in Hedging
which one asset is held to
offset the risk associated with
another asset.
, A financial instrument whose Derivative
value is derived from the value
of an underlying asset, which
can be an index, an asset,
yield on an asset, weather
conditions, inflation, loans,
bonds, an insurance risk, or
other items.
A risk control technique that Diversification
spreads loss exposures over
numerous projects, products,
markets, or regions
A chance of loss or no loss, but Pure risk
no chance of gain.
A chance of loss, no loss, or Speculative risk
gain.
The relative association Covariance
between variables to move in
tandem or independently of
each other.
A relationship between Correlation
variables.
A risk management technique Insurance
that transfers the potential
financial consequences of
certain specified loss
exposures from the insured to
with Verified Solutions | Latest Updated
2026
The selection and Risk treatment
implementation of actions to
help manage or mitigate a
risk.
The level of risk remaining Residual risk
after actions are taken to alter
the level of risk.
A risk control technique that Avoidance
involves ceasing or never
undertaking an activity so that
the possibility of a future loss
occurring from that activity is
eliminated.
A risk control technique that Loss prevention
reduces the frequency of a
particular loss.
A risk control technique that Loss reduction
reduces the severity of a
particular loss
The shifting of risk from one Risk transfer
individual or organization to
another.
,A risk financing technique that Retention
involves assumption of risk in
which gains and losses are
retained within the
organization.
A risk management technique Risk financing
that includes steps to pay for
or transfer the cost of losses.
A network of objects that Internet of Things (IoT)
transmit data to computers.
The use of technological Telematics
devices in vehicles with
wireless communication and
GPS tracking that transmit
data to businesses or
government agencies; some
return information for the
driver.
Artificial intelligence in which Machine learning
computers continually teach
themselves to make better
decisions based on previous
results and new data.
A financial transaction in Hedging
which one asset is held to
offset the risk associated with
another asset.
, A financial instrument whose Derivative
value is derived from the value
of an underlying asset, which
can be an index, an asset,
yield on an asset, weather
conditions, inflation, loans,
bonds, an insurance risk, or
other items.
A risk control technique that Diversification
spreads loss exposures over
numerous projects, products,
markets, or regions
A chance of loss or no loss, but Pure risk
no chance of gain.
A chance of loss, no loss, or Speculative risk
gain.
The relative association Covariance
between variables to move in
tandem or independently of
each other.
A relationship between Correlation
variables.
A risk management technique Insurance
that transfers the potential
financial consequences of
certain specified loss
exposures from the insured to
