ARM 401 EXAM PRACTICE QUESTIONS AND
ANSWERS VERIFIED SOLUTIONS
◉ HAZOP Process Steps. Answer: 1. Divide project/system into
small components
2. Review components to identify risk
3. Identify cause and potential outcomes of risks
4. Develop solutions to risks
5. Ensure solutions work and reevaluate
◉ SWOT analysis (strengths, weaknesses, opportunities, threats).
Answer: A SWOT analysis is useful when there is a specific goal,
such as determining whether engaging in a new product or project is
feasible. It's less useful for analyzing current processes and
procedures to identify risks unless there is a specific objective, such
as whether a procedure conforms to new regulations or customer
specifications. A goal is necessary to keep the SWOT analysis from
becoming too general or failing to provide actionable information.
Generally "go" or "no go"
◉ Risk Threshold. Answer: The range or amount of risk that is
acceptable
◉ Radio Frequency Identification (RFID). Answer: A technology that
uses radio frequency to identify objects
,◉ Artificial Intelligence. Answer: Computer processing or output that
simulates human reasoning or knowledge
◉ Computer Vision. Answer: A technology that simulates human
vision
◉ Risk registers should always do these 4 things:. Answer: Identifies
the organization's risks appropriately
Prioritizes risks according to their potential effects on the organization
Allows for collaboration and instant updating by risk managers and
stakeholders
Tracks improvement actions to take, when they're taken, and when a
follow-up or review will occur
◉ Risk Register. Answer: A tool developed at the risk owner level that
links specific activities, processes, projects, or plans to a list of
identified risks and results of risk analysis and evaluation and that is
ultimately consolidated at the enterprise level
◉ Risk Map vs Risk Register. Answer: An organization would use a
risk register to identify, describe, and prioritize the risks of either a
specific circumstance (such as a process, project, or risk event) or the
organization as a whole. It's essentially a ledger to document risks and
all information related to them. A risk map, on the other hand, is
developed after a risk register and incorporates information from the
register. A risk map provides a visual representation of a risk register's
,data to show which risks are the highest priority for risk managers and
owners.
◉ Relationship between inherent, residual, and optimuml risk.
Answer: if the difference between the inherent risk and what the
residual risk will be after a treatment is applied is small, either the risk
doesn't need to be treated or the treatment itself isn't effective enough.
The difference between the residual risk and optimum risk represents
how much further a risk can be reduced
◉ Risk Map. Answer: A template depicting the likelihood and
potential impact/consequences of risks
◉ Inherent Risk. Answer: The level of risk that would be faced if it
were to remain untreated or no action were to be taken to alter the
level of risk
◉ Residual Risk. Answer: The level of risk remaining after actions
are taken to alter the level of risk
◉ Optimum Risk. Answer: The level of risk that is within an
organization's risk appetite
◉ Coordination. Answer: the act of improving efficiency and
reducing redundancy by some combination of arranging, assigning,
organizing, or scheduling activities
, ◉ Collaboration vs. Cooperation. Answer: Collaboration is the act of
working together to achieve a shared objective. Cooperation is the act
of working together to achieve individual objectives instead of a
shared objective
◉ Predictive techniques, such as decision tree analysis and event tree
analysis:. Answer: assign numerical values to various components
related to a risk and combine them to produce a probability estimate
◉ Risk Control. Answer: A conscious act or decision not to act that
reduces the frequency and/or severity of losses or makes losses more
predictable
◉ Three categories of accident causes:. Answer: poor management,
safety policy, and personal or environmental factors
◉ Sequence of Events (Domino Theory). Answer: The sequence of
events theory proposes that these five accident factors can form a
chain of events that, like dominos, lead in succession to the resulting
accident and injury:
1. Ancestry and social environment, such as inherited psychological
disorders and dysfunctional social environments
2. Fault of person, such as impulsiveness, violent temper,
nervousness, or a refusal to adapt to safe practices
3. An unsafe act and/or a mechanical or physical hazard, such as
improper use of machines or equipment, or poor maintenance of
surroundings, such as slippery floors or faulty railings
4. The accident itself
ANSWERS VERIFIED SOLUTIONS
◉ HAZOP Process Steps. Answer: 1. Divide project/system into
small components
2. Review components to identify risk
3. Identify cause and potential outcomes of risks
4. Develop solutions to risks
5. Ensure solutions work and reevaluate
◉ SWOT analysis (strengths, weaknesses, opportunities, threats).
Answer: A SWOT analysis is useful when there is a specific goal,
such as determining whether engaging in a new product or project is
feasible. It's less useful for analyzing current processes and
procedures to identify risks unless there is a specific objective, such
as whether a procedure conforms to new regulations or customer
specifications. A goal is necessary to keep the SWOT analysis from
becoming too general or failing to provide actionable information.
Generally "go" or "no go"
◉ Risk Threshold. Answer: The range or amount of risk that is
acceptable
◉ Radio Frequency Identification (RFID). Answer: A technology that
uses radio frequency to identify objects
,◉ Artificial Intelligence. Answer: Computer processing or output that
simulates human reasoning or knowledge
◉ Computer Vision. Answer: A technology that simulates human
vision
◉ Risk registers should always do these 4 things:. Answer: Identifies
the organization's risks appropriately
Prioritizes risks according to their potential effects on the organization
Allows for collaboration and instant updating by risk managers and
stakeholders
Tracks improvement actions to take, when they're taken, and when a
follow-up or review will occur
◉ Risk Register. Answer: A tool developed at the risk owner level that
links specific activities, processes, projects, or plans to a list of
identified risks and results of risk analysis and evaluation and that is
ultimately consolidated at the enterprise level
◉ Risk Map vs Risk Register. Answer: An organization would use a
risk register to identify, describe, and prioritize the risks of either a
specific circumstance (such as a process, project, or risk event) or the
organization as a whole. It's essentially a ledger to document risks and
all information related to them. A risk map, on the other hand, is
developed after a risk register and incorporates information from the
register. A risk map provides a visual representation of a risk register's
,data to show which risks are the highest priority for risk managers and
owners.
◉ Relationship between inherent, residual, and optimuml risk.
Answer: if the difference between the inherent risk and what the
residual risk will be after a treatment is applied is small, either the risk
doesn't need to be treated or the treatment itself isn't effective enough.
The difference between the residual risk and optimum risk represents
how much further a risk can be reduced
◉ Risk Map. Answer: A template depicting the likelihood and
potential impact/consequences of risks
◉ Inherent Risk. Answer: The level of risk that would be faced if it
were to remain untreated or no action were to be taken to alter the
level of risk
◉ Residual Risk. Answer: The level of risk remaining after actions
are taken to alter the level of risk
◉ Optimum Risk. Answer: The level of risk that is within an
organization's risk appetite
◉ Coordination. Answer: the act of improving efficiency and
reducing redundancy by some combination of arranging, assigning,
organizing, or scheduling activities
, ◉ Collaboration vs. Cooperation. Answer: Collaboration is the act of
working together to achieve a shared objective. Cooperation is the act
of working together to achieve individual objectives instead of a
shared objective
◉ Predictive techniques, such as decision tree analysis and event tree
analysis:. Answer: assign numerical values to various components
related to a risk and combine them to produce a probability estimate
◉ Risk Control. Answer: A conscious act or decision not to act that
reduces the frequency and/or severity of losses or makes losses more
predictable
◉ Three categories of accident causes:. Answer: poor management,
safety policy, and personal or environmental factors
◉ Sequence of Events (Domino Theory). Answer: The sequence of
events theory proposes that these five accident factors can form a
chain of events that, like dominos, lead in succession to the resulting
accident and injury:
1. Ancestry and social environment, such as inherited psychological
disorders and dysfunctional social environments
2. Fault of person, such as impulsiveness, violent temper,
nervousness, or a refusal to adapt to safe practices
3. An unsafe act and/or a mechanical or physical hazard, such as
improper use of machines or equipment, or poor maintenance of
surroundings, such as slippery floors or faulty railings
4. The accident itself
