ARM 401 STUDY GUIDE 2026/2027 QUESTIONS AND
SOLUTIONS RATED A+
✔✔Regression analysis - ✔✔A statistical technique that is used to estimate
relationships between variables.
✔✔Linear regression analysis - ✔✔a form of statistical analysis that seeks the equation
for the straight line that best describes the relationship between two ratio variables
✔✔Economic data - ✔✔Data regarding interest rates, asset prices, exchange rates, the
Consumer Price Index, and other information about the global, the national, or a
regional economy.
✔✔Predictive model - ✔✔a model used to predict an unknown outcome by means of a
defined target variable
✔✔Target variable - ✔✔The predefined attribute whose value is being predicted in a
data analytical model
✔✔Overfitting - ✔✔The process of fitting a model too closely to the training data for the
model to be effective on other data.
✔✔Accuracy - ✔✔A description of how close a measurement is to the true value of the
quantity measured.
✔✔Precision - ✔✔In model performance evaluation, a model's correct positive
predictions divided by its total positive predictions.
✔✔Recall - ✔✔In model performance evaluation, a model's correct positive predictions
divided by the sum of its correct positive predictions and incorrect negative predictions.
✔✔Classification tree - ✔✔A supervised learning technique that uses a structure similar
to a tree to segment data according to known attributes to determine the value of a
categorical target variable
✔✔Cluster analysis - ✔✔A model that determines previously unknown groupings of
data.
✔✔Data mining - ✔✔the process of analyzing data to extract information not offered by
the raw data alone
✔✔Centrality measure - ✔✔in a social network context, the quantification of a node's
relationship to other nodes in the same network
, ✔✔Big data - ✔✔a broad term for datasets so large or complex that traditional data
processing applications are inadequate.
✔✔Data science - ✔✔An interdisciplinary field involving the design and use of
techniques to process very large amounts of data from a variety of sources and to
provide knowledge based on the data.
✔✔Windstorm - ✔✔A storm consisting of violent wind capable of causing damage.
✔✔Tornado - ✔✔A type of violent windstorm that consists of winds rotating at speeds of
up to 300 miles per hour; a partial vacuum develops at the center of the storm (vortex).
✔✔Box action design - ✔✔Earthquake-resistant construction, used in buildings under
three stories tall, that integrates roof and floor diaphragms that can flex to transmit and
distribute the forces an earthquake exerts on a structure.
✔✔Frame action design - ✔✔Earthquake-resistant construction that relies on the
resilience of steel or specially designed reinforced concrete to absorb energy while
undergoing considerable distortion and return to their original shapes.
✔✔Book value (net depreciated value) - ✔✔An asset's historical cost minus
accumulated depreciation.
✔✔Historical cost - ✔✔the actual amount paid for merchandise or other items
✔✔Replacement cost - ✔✔The cost to repair or replace property using new materials of
like kind and quality with no deduction for depreciation.
✔✔Functional replacement cost - ✔✔The cost of replacing damaged property with
similar property that performs the same function but might not be identical to the
damaged property.
✔✔Market value - ✔✔the amount for which something can be sold on a given market.
✔✔Economic value - ✔✔The amount that property is worth based on the ability of the
property to produce income.
✔✔Fiduciary duty - ✔✔That duty owed by an agent to act in the highest good faith
toward the principal and not to obtain any advantage over the latter by the slightest
misrepresentation, concealment, duress or pressure.
✔✔Avoidance - ✔✔A risk control technique that involves ceasing or never undertaking
an activity so that the possibility of a future loss occurring from that activity is eliminated.
SOLUTIONS RATED A+
✔✔Regression analysis - ✔✔A statistical technique that is used to estimate
relationships between variables.
✔✔Linear regression analysis - ✔✔a form of statistical analysis that seeks the equation
for the straight line that best describes the relationship between two ratio variables
✔✔Economic data - ✔✔Data regarding interest rates, asset prices, exchange rates, the
Consumer Price Index, and other information about the global, the national, or a
regional economy.
✔✔Predictive model - ✔✔a model used to predict an unknown outcome by means of a
defined target variable
✔✔Target variable - ✔✔The predefined attribute whose value is being predicted in a
data analytical model
✔✔Overfitting - ✔✔The process of fitting a model too closely to the training data for the
model to be effective on other data.
✔✔Accuracy - ✔✔A description of how close a measurement is to the true value of the
quantity measured.
✔✔Precision - ✔✔In model performance evaluation, a model's correct positive
predictions divided by its total positive predictions.
✔✔Recall - ✔✔In model performance evaluation, a model's correct positive predictions
divided by the sum of its correct positive predictions and incorrect negative predictions.
✔✔Classification tree - ✔✔A supervised learning technique that uses a structure similar
to a tree to segment data according to known attributes to determine the value of a
categorical target variable
✔✔Cluster analysis - ✔✔A model that determines previously unknown groupings of
data.
✔✔Data mining - ✔✔the process of analyzing data to extract information not offered by
the raw data alone
✔✔Centrality measure - ✔✔in a social network context, the quantification of a node's
relationship to other nodes in the same network
, ✔✔Big data - ✔✔a broad term for datasets so large or complex that traditional data
processing applications are inadequate.
✔✔Data science - ✔✔An interdisciplinary field involving the design and use of
techniques to process very large amounts of data from a variety of sources and to
provide knowledge based on the data.
✔✔Windstorm - ✔✔A storm consisting of violent wind capable of causing damage.
✔✔Tornado - ✔✔A type of violent windstorm that consists of winds rotating at speeds of
up to 300 miles per hour; a partial vacuum develops at the center of the storm (vortex).
✔✔Box action design - ✔✔Earthquake-resistant construction, used in buildings under
three stories tall, that integrates roof and floor diaphragms that can flex to transmit and
distribute the forces an earthquake exerts on a structure.
✔✔Frame action design - ✔✔Earthquake-resistant construction that relies on the
resilience of steel or specially designed reinforced concrete to absorb energy while
undergoing considerable distortion and return to their original shapes.
✔✔Book value (net depreciated value) - ✔✔An asset's historical cost minus
accumulated depreciation.
✔✔Historical cost - ✔✔the actual amount paid for merchandise or other items
✔✔Replacement cost - ✔✔The cost to repair or replace property using new materials of
like kind and quality with no deduction for depreciation.
✔✔Functional replacement cost - ✔✔The cost of replacing damaged property with
similar property that performs the same function but might not be identical to the
damaged property.
✔✔Market value - ✔✔the amount for which something can be sold on a given market.
✔✔Economic value - ✔✔The amount that property is worth based on the ability of the
property to produce income.
✔✔Fiduciary duty - ✔✔That duty owed by an agent to act in the highest good faith
toward the principal and not to obtain any advantage over the latter by the slightest
misrepresentation, concealment, duress or pressure.
✔✔Avoidance - ✔✔A risk control technique that involves ceasing or never undertaking
an activity so that the possibility of a future loss occurring from that activity is eliminated.
