ARM 400 COMPREHENSIVE QUESTIONS AND
ANSWERS SURE A+
✔✔An organization must meet the standard of care that it owes to others in order to
ensure that
A. Legal obligations are satisfied.
B. Post-loss goals are in place.
C. Operations are efficient.
D. Contracts are not breached. - ✔✔A
✔✔According to the law of large numbers, as the number of exposure units insured
increases,
A. Fewer losses are expected to occur.
B. The size of the average loss declines.
C. The relative accuracy of predictions about future losses increases.
D. The probability of an underwriting loss increases. - ✔✔C
✔✔Risk can be classified as diversifiable or nondiversifiable. Which one of the following
statements is true with respect to this type of risk classification?
A. Diversifiable risks tend not to be correlated so they can be managed through
diversification or spread of risk.
B. Systemic risks are generally diversifiable.
,C. Private insurance tends to concentrate on nondiversifiable risks; government
insurance is often suitable for diversifiable risks.
D. Inflation, unemployment and natural disasters - ✔✔A
✔✔The fundamental purpose of a risk management framework is to
A. Maximize profits for all stakeholders.
B. Integrate risk management throughout the organization.
C. Define and eliminate potential losses.
D. Reduce the cost of risk. - ✔✔B
✔✔Which one of the following is one of the five steps of the risk management process?
A. Align and integrate
B. Establish accountability
C. Scan environment
D. Allocate resources - ✔✔C
✔✔Which one of the following best explains how most smart products potentially
improve risk management?
A. They measure worker fatigue.
B. They scan and inspect structures for unsafe conditions.
C. They assess risks in dangerous areas.
D. They generate big data to which advanced analytics can be applied. - ✔✔D
✔✔Clear-Rite Company specializes in the clean-up of hazardous chemical spills.
Workers performing clean-up operations must use safety suits to prevent exposure to
the chemicals. The suits include pulse and respiration monitors, body temperature
sensors, and chemical sensors. The monitors and sensors report data to a mobile
operations center which is deployed to each clean-up site. The pulse and respiration
monitors and the sensors that are part of the protective gear are called
A. Magnetometers.
B - ✔✔C
✔✔Data Entry Company (DEC) offers customers data entry services. A customer can
hire DEC to enter survey data to be analyzed. Many DEC employees spend long hours
entering data on a computer. DEC has experienced neck strain and wrist pain
complaints from their employees, increasing the company's workers compensation
costs. DEC investigated the complaints of its data-entry employees. DEC adopted
curved keyboards for data entry, wrist-rests for those entering data, and uniform chair
heights and displ - ✔✔D
✔✔Which one of the following statements about the use of drones is true?
A. The use of drones is limited to military applications.
B. Space and weight limitations prevent drones from being equipped with sensors and
cameras.
C. Drones may be equipped with cameras that relay data in real-time.
,D. The reliance on humans to operate drones severely limits their application for
commercial uses. - ✔✔C
✔✔Many auto manufacturers have automated a portion of their assembly lines by
introducing a smart product. The smart product performs repetitive tasks, such as
making the same weld on each vehicle frame as it passes the smart product. These
smart products, which can be fixed or mobile, reduce repetitive motion injuries that
humans might suffer. They can also be used to perform dangerous tasks and in heavy-
lifting jobs. These smart products are called
A. Wearables.
B. Automated sensors.
C. Robots. - ✔✔C
✔✔Take Your Order (TYO) is a company that specializes in taking product orders for
vendors. The manufacturer of a product can run a television or internet ad for a product
with a toll-free number. Customer calls for the products are routed to TYO, where one
hundred operators are available to receive the calls. Each operator is assigned a
cubicle with a computer terminal, video display monitor, and a telephone. TYO
experienced high workers compensation claims from its operators, claiming neck strai -
✔✔D
✔✔A municipal water plant installed water flow sensors and water pressure sensors on
the water pipes leaving the plant. The sensors make sure water is flowing properly and
that there are no leaks or clogs which could produce a loss. These types of sensors are
A. Thermal sensors.
B. Mechanical sensors.
C. Biochemical sensors.
D. Radiant sensors. - ✔✔B
✔✔In addition to metal detectors, many airports have installed a second type of
scanning technology for checked baggage and cargo. The checked bags and cargo
pass through a portal with scanners programmed to detect and test for explosive trace
fumes. These scanners, which detect explosives based on air samples, are an example
of what type of sensor used for risk assessment and control?
A. Radiant sensors.
B. Thermal sensors.
C. Biochemical sensors.
D. Mechanical sensors. - ✔✔C
✔✔AMRM Insurance Company sells insurance in Virginia, North Carolina, South
Carolina, and Georgia. The company has compiled a policyowner data base that can be
used to send text messages when hurricanes approach. The company provides early
warnings, storm updates from the National Weather Service, and hurricane safety
measures. The company credits the system with reduced hurricane claims. The use of
the texting system is an example of
, A. Preventive analytics.
B. Artificial intelligence.
C. Sensor - ✔✔A
✔✔In an effort to reduce expenses, increase profitability, and reduce human errors;
ABC Insurance Company decided to automate most of its personal lines underwriting
function. The company now uses standardized application forms that are submitted
electronically to one of the company's regional offices. At each regional office, a
computer with a scanner reads the applications. The computer has been programmed
with acceptable answers to the questions. If the answers on the application are all
accept - ✔✔D
✔✔Autonomous Vehicle Applications (AVA) is a start-up company that develops safety
technologies that can be sold to companies that are producing autonomous vehicles.
One technology AVA is developing allows an autonomous vehicle to detect, extract, and
analyze images; and then to respond to the images. For example, the technology would
detect a presence in a crosswalk, extract the image, and a computer would analyze the
image. When the image was determined to be a human being, the vehicle would slo -
✔✔B
✔✔Which one of the following uses infrared light to detect nearby objects?
A. Wearables
B. Drones
C. Robots
D. Lidar - ✔✔D
✔✔Last year, three Metro City firemen died responding to a fire at a chemical plant,
when they were overcome by toxic fumes. In response, Metro City is purchasing
advanced first responder gear. It includes special flame retardant suits with chemical
and explosive fume sensors, air quality sensors, and heat sensors. Responders will also
wear special watches that will track a responder's pulse, respiration, and blood
pressure; and helmets that include video cameras. All of these sensors will feed da -
✔✔B
✔✔The emerging technologies applied to risk assessment and control link the physical
domain to the virtual domain. Together, these domains linked by the emerging
technologies create a
A. Connected ecosystem.
B. Risk management information system.
C. Smart system.
D. Risk management matrix. - ✔✔A
✔✔Precision Electronic Components manufactures circuit boards, microchips, and
other electronic products. Given the precision necessary for their products, the
manufacturing environment must be controlled. Temperature, humidity, static electricity
ANSWERS SURE A+
✔✔An organization must meet the standard of care that it owes to others in order to
ensure that
A. Legal obligations are satisfied.
B. Post-loss goals are in place.
C. Operations are efficient.
D. Contracts are not breached. - ✔✔A
✔✔According to the law of large numbers, as the number of exposure units insured
increases,
A. Fewer losses are expected to occur.
B. The size of the average loss declines.
C. The relative accuracy of predictions about future losses increases.
D. The probability of an underwriting loss increases. - ✔✔C
✔✔Risk can be classified as diversifiable or nondiversifiable. Which one of the following
statements is true with respect to this type of risk classification?
A. Diversifiable risks tend not to be correlated so they can be managed through
diversification or spread of risk.
B. Systemic risks are generally diversifiable.
,C. Private insurance tends to concentrate on nondiversifiable risks; government
insurance is often suitable for diversifiable risks.
D. Inflation, unemployment and natural disasters - ✔✔A
✔✔The fundamental purpose of a risk management framework is to
A. Maximize profits for all stakeholders.
B. Integrate risk management throughout the organization.
C. Define and eliminate potential losses.
D. Reduce the cost of risk. - ✔✔B
✔✔Which one of the following is one of the five steps of the risk management process?
A. Align and integrate
B. Establish accountability
C. Scan environment
D. Allocate resources - ✔✔C
✔✔Which one of the following best explains how most smart products potentially
improve risk management?
A. They measure worker fatigue.
B. They scan and inspect structures for unsafe conditions.
C. They assess risks in dangerous areas.
D. They generate big data to which advanced analytics can be applied. - ✔✔D
✔✔Clear-Rite Company specializes in the clean-up of hazardous chemical spills.
Workers performing clean-up operations must use safety suits to prevent exposure to
the chemicals. The suits include pulse and respiration monitors, body temperature
sensors, and chemical sensors. The monitors and sensors report data to a mobile
operations center which is deployed to each clean-up site. The pulse and respiration
monitors and the sensors that are part of the protective gear are called
A. Magnetometers.
B - ✔✔C
✔✔Data Entry Company (DEC) offers customers data entry services. A customer can
hire DEC to enter survey data to be analyzed. Many DEC employees spend long hours
entering data on a computer. DEC has experienced neck strain and wrist pain
complaints from their employees, increasing the company's workers compensation
costs. DEC investigated the complaints of its data-entry employees. DEC adopted
curved keyboards for data entry, wrist-rests for those entering data, and uniform chair
heights and displ - ✔✔D
✔✔Which one of the following statements about the use of drones is true?
A. The use of drones is limited to military applications.
B. Space and weight limitations prevent drones from being equipped with sensors and
cameras.
C. Drones may be equipped with cameras that relay data in real-time.
,D. The reliance on humans to operate drones severely limits their application for
commercial uses. - ✔✔C
✔✔Many auto manufacturers have automated a portion of their assembly lines by
introducing a smart product. The smart product performs repetitive tasks, such as
making the same weld on each vehicle frame as it passes the smart product. These
smart products, which can be fixed or mobile, reduce repetitive motion injuries that
humans might suffer. They can also be used to perform dangerous tasks and in heavy-
lifting jobs. These smart products are called
A. Wearables.
B. Automated sensors.
C. Robots. - ✔✔C
✔✔Take Your Order (TYO) is a company that specializes in taking product orders for
vendors. The manufacturer of a product can run a television or internet ad for a product
with a toll-free number. Customer calls for the products are routed to TYO, where one
hundred operators are available to receive the calls. Each operator is assigned a
cubicle with a computer terminal, video display monitor, and a telephone. TYO
experienced high workers compensation claims from its operators, claiming neck strai -
✔✔D
✔✔A municipal water plant installed water flow sensors and water pressure sensors on
the water pipes leaving the plant. The sensors make sure water is flowing properly and
that there are no leaks or clogs which could produce a loss. These types of sensors are
A. Thermal sensors.
B. Mechanical sensors.
C. Biochemical sensors.
D. Radiant sensors. - ✔✔B
✔✔In addition to metal detectors, many airports have installed a second type of
scanning technology for checked baggage and cargo. The checked bags and cargo
pass through a portal with scanners programmed to detect and test for explosive trace
fumes. These scanners, which detect explosives based on air samples, are an example
of what type of sensor used for risk assessment and control?
A. Radiant sensors.
B. Thermal sensors.
C. Biochemical sensors.
D. Mechanical sensors. - ✔✔C
✔✔AMRM Insurance Company sells insurance in Virginia, North Carolina, South
Carolina, and Georgia. The company has compiled a policyowner data base that can be
used to send text messages when hurricanes approach. The company provides early
warnings, storm updates from the National Weather Service, and hurricane safety
measures. The company credits the system with reduced hurricane claims. The use of
the texting system is an example of
, A. Preventive analytics.
B. Artificial intelligence.
C. Sensor - ✔✔A
✔✔In an effort to reduce expenses, increase profitability, and reduce human errors;
ABC Insurance Company decided to automate most of its personal lines underwriting
function. The company now uses standardized application forms that are submitted
electronically to one of the company's regional offices. At each regional office, a
computer with a scanner reads the applications. The computer has been programmed
with acceptable answers to the questions. If the answers on the application are all
accept - ✔✔D
✔✔Autonomous Vehicle Applications (AVA) is a start-up company that develops safety
technologies that can be sold to companies that are producing autonomous vehicles.
One technology AVA is developing allows an autonomous vehicle to detect, extract, and
analyze images; and then to respond to the images. For example, the technology would
detect a presence in a crosswalk, extract the image, and a computer would analyze the
image. When the image was determined to be a human being, the vehicle would slo -
✔✔B
✔✔Which one of the following uses infrared light to detect nearby objects?
A. Wearables
B. Drones
C. Robots
D. Lidar - ✔✔D
✔✔Last year, three Metro City firemen died responding to a fire at a chemical plant,
when they were overcome by toxic fumes. In response, Metro City is purchasing
advanced first responder gear. It includes special flame retardant suits with chemical
and explosive fume sensors, air quality sensors, and heat sensors. Responders will also
wear special watches that will track a responder's pulse, respiration, and blood
pressure; and helmets that include video cameras. All of these sensors will feed da -
✔✔B
✔✔The emerging technologies applied to risk assessment and control link the physical
domain to the virtual domain. Together, these domains linked by the emerging
technologies create a
A. Connected ecosystem.
B. Risk management information system.
C. Smart system.
D. Risk management matrix. - ✔✔A
✔✔Precision Electronic Components manufactures circuit boards, microchips, and
other electronic products. Given the precision necessary for their products, the
manufacturing environment must be controlled. Temperature, humidity, static electricity
