ARM 400 Exam 2023!!
Big Data
Set of data that are too large to be gathered and analysed by traditional data.
Strategic Redeployment Plan
a comprehensive plan for resiliency after a severe disruption
Business Impact Analysis (BIA)
assesses identified risks and determines their overall effect on the firm's ability to meet
its key objectives
Risk Managers
identify, evaluate and treat risks within stated risk appetites and risk tolerances. The risk
management team monitors and reports on risk management activities.
Privacy Impact Assessment (PIA)
defines what data is private and identifies the risk to that data.
4 Data Governance Goals
Accuracy; Validity; Timeliness; Completeness
Board of Directors
sets the firms risk appetite and stays aware of significant risks. They also determine the
amount and types of risk the firm will pursue, retain, reduce and avoid.
Corporate Governance Codes
developed by governments and business oversight organisations to provide broad
guidance to corporate boards and management.
3 Most Important Corporate Board Committees
Audit Committee; Compensation Committee; Nominations/Corporate Governance
Committee
Monitoring Costs
the costs of overseeing corporate decision makers (shareholders bear most of these
costs)
Bonding Costs
are the managers costs of demonstrating that they are serving the shareholders
interests (managers bear most of these costs)
Incentive Alignment Costs
costs of lost value because managers interest of never perfectly aligned with
shareholders' interest (shareholders bear most of these costs)
Hierarchy Culture
well defined decision making authority with standardized rules and procedures
Market Culture
Focuses on outward relationships and prioritizes profitability, bottom-line results and
stable customer bases
Clan Culture
Views the firm as a family, emphasizes teamwork, and encourages workers to suggest
improvements to processes
Adhocracy Culture
Emphasizes adaptability and shifts authority as needed
Risk-Seeking (Naive)
, This attitude anticipates positive results, often underemphasising a risk's potential
negative effects
Risk-Avoiding (Risk Obsessed)
This attitude anticipates negative results, avoid innovation and transfer risk wherever
possible
Risk-Optimizing (Risk Managed)
This attitude evaluates a risk's potential positive and negative outcomes and choose risk
carefully
Delegating Management Style
Sets broad, strategic goals for all stakeholders and lets individual stakeholders decide
how to meet those goals
Directive Management Style
Tells stakeholders exactly how to meet their goals and limits the flow of information
Supportive Management Style
Explains the thinking behind strategic goals and then encourages stakeholders to
pursue related goals, send feedback to managers, and to set up their own
communication networks
5 Techniques for Treating Risks
Avoidance; Modification; Transfer; Retention; Optimize/Exploit
Three Major Ways to Classify Risk
Pure/Speculative; Subjective/Objective; Diversifiable/Non-Diversifiable
Risk Management Assessment Process
Scan; Identify; Analyse; Treat; Monitor
5 Benefits of Holistic Risk Management
Tolerable Uncertainty; Profitability and Growth; Legal and Compliance; Social
Responsibility; Reduced Deterrent Effects
4 Components of Holistic Risk Management
Reduced Downside Risk; Earnings Stability; Identification of Emerging Risks; Continuity
of Operations
Risktech
goes beyond insurtech by expanding its focus on how to make risk financing more
efficient to include how to prevent and mitigate risk in a variety of industries.
Hazard Risks
arise from property, liability, or personnel loss exposures and are generally the subject
of insurance (pure)
Operational Risk
arise from people or failure in processes, systems or controls including those involving
information technology (pure)
Financial Risk
arise from the effect of market forces on financial assets or liabilities and include market
risk, credit risk, liquidity risk and price risk (speculative)
Strategic Risk
arise from trends in the economy and society, including changes in the economic,
political and competitive environments (speculative)
Smart Product
Big Data
Set of data that are too large to be gathered and analysed by traditional data.
Strategic Redeployment Plan
a comprehensive plan for resiliency after a severe disruption
Business Impact Analysis (BIA)
assesses identified risks and determines their overall effect on the firm's ability to meet
its key objectives
Risk Managers
identify, evaluate and treat risks within stated risk appetites and risk tolerances. The risk
management team monitors and reports on risk management activities.
Privacy Impact Assessment (PIA)
defines what data is private and identifies the risk to that data.
4 Data Governance Goals
Accuracy; Validity; Timeliness; Completeness
Board of Directors
sets the firms risk appetite and stays aware of significant risks. They also determine the
amount and types of risk the firm will pursue, retain, reduce and avoid.
Corporate Governance Codes
developed by governments and business oversight organisations to provide broad
guidance to corporate boards and management.
3 Most Important Corporate Board Committees
Audit Committee; Compensation Committee; Nominations/Corporate Governance
Committee
Monitoring Costs
the costs of overseeing corporate decision makers (shareholders bear most of these
costs)
Bonding Costs
are the managers costs of demonstrating that they are serving the shareholders
interests (managers bear most of these costs)
Incentive Alignment Costs
costs of lost value because managers interest of never perfectly aligned with
shareholders' interest (shareholders bear most of these costs)
Hierarchy Culture
well defined decision making authority with standardized rules and procedures
Market Culture
Focuses on outward relationships and prioritizes profitability, bottom-line results and
stable customer bases
Clan Culture
Views the firm as a family, emphasizes teamwork, and encourages workers to suggest
improvements to processes
Adhocracy Culture
Emphasizes adaptability and shifts authority as needed
Risk-Seeking (Naive)
, This attitude anticipates positive results, often underemphasising a risk's potential
negative effects
Risk-Avoiding (Risk Obsessed)
This attitude anticipates negative results, avoid innovation and transfer risk wherever
possible
Risk-Optimizing (Risk Managed)
This attitude evaluates a risk's potential positive and negative outcomes and choose risk
carefully
Delegating Management Style
Sets broad, strategic goals for all stakeholders and lets individual stakeholders decide
how to meet those goals
Directive Management Style
Tells stakeholders exactly how to meet their goals and limits the flow of information
Supportive Management Style
Explains the thinking behind strategic goals and then encourages stakeholders to
pursue related goals, send feedback to managers, and to set up their own
communication networks
5 Techniques for Treating Risks
Avoidance; Modification; Transfer; Retention; Optimize/Exploit
Three Major Ways to Classify Risk
Pure/Speculative; Subjective/Objective; Diversifiable/Non-Diversifiable
Risk Management Assessment Process
Scan; Identify; Analyse; Treat; Monitor
5 Benefits of Holistic Risk Management
Tolerable Uncertainty; Profitability and Growth; Legal and Compliance; Social
Responsibility; Reduced Deterrent Effects
4 Components of Holistic Risk Management
Reduced Downside Risk; Earnings Stability; Identification of Emerging Risks; Continuity
of Operations
Risktech
goes beyond insurtech by expanding its focus on how to make risk financing more
efficient to include how to prevent and mitigate risk in a variety of industries.
Hazard Risks
arise from property, liability, or personnel loss exposures and are generally the subject
of insurance (pure)
Operational Risk
arise from people or failure in processes, systems or controls including those involving
information technology (pure)
Financial Risk
arise from the effect of market forces on financial assets or liabilities and include market
risk, credit risk, liquidity risk and price risk (speculative)
Strategic Risk
arise from trends in the economy and society, including changes in the economic,
political and competitive environments (speculative)
Smart Product
