2024 BARM 400 EXAM 2 LATEST REAL NEWEST
VERSIONS QUESTIONS WITH CORRECT
ANSWERS GRADED A+
Which one of the following standards was developed in response to the financial crisis
that began in 2007?
A. Basel III
B. ISO 31000
C. Capital Adequacy Framework
D. Solvency II - CORRECT ANSWER✔✔A
The Federal Sentencing Guidelines require a senior manager to have responsibility for
the organization's entire compliance program. The individual selected is typically from
which one of the following functions of the organization?
A. Internal audit
B. Operations
C. Human development
D. Legal - CORRECT ANSWER✔✔A
The Chief Compliance Officer's responsibilities include all of the following, EXCEPT:
A. Being the legal expert on employment laws
B. Promoting education of compliance requirements
C. Monitoring compliance programs
D. Acting as a liaison for compliance issues - CORRECT ANSWER✔✔A
Which one of the following is an example of a principles-based traffic control regulation?
A. Driver and passengers must wear a safety belt when the car is in motion
B. Driver must maintain a reasonable following distance appropriate to speed and
conditions
C. Driver must maintain liability insurance that meets the state minimum financial
responsibility limit
D. Driver must drive at a speed within the posted speed limit - CORRECT ANSWER✔
✔B
Which one of the following statements is true regarding Basel III?
A. Basel III is a voluntary standard for the insurers which encourages senior
management to take the lead in establishing a strong risk management culture.
,B. Basel III was developed to reduce the likelihood of insurer insolvency, market
disruption, and consumer loss.
C. Basel III was developed to address both the risk of individual organizations and
systemic risk in the banking sector.
D. Basel III is a regulatory standard for banks of the European Union and the United
Kingdom - CORRECT ANSWER✔✔C
When comparing principles-based regulation with rules-based regulation, which one of
the following statements is correct?
A. Principles-based regulation requires less communication between the regulator and
regulated entity.
B. Principles-based regulation tends to use a one-size-fits-all approach.
C. Principles-based regulation responds more quickly to a changing environment.
D. Principles-based regulation emphasizes conformity rather than the outcome. -
CORRECT ANSWER✔✔C
The Sarbanes-Oxley Compliance (SOX) category involves all of the following
compliance levels, EXCEPT:
A. External
B. Mandatory
C. Internal
D. Voluntary - CORRECT ANSWER✔✔D
Solvency II is a regulatory standard that should reduce the likelihood of insolvency,
market disruption, and consumer loss in which one of the following industries?
A. Insurance
B. Automobile
C. Banking
D. Health care - CORRECT ANSWER✔✔A
Examples of Principles-Based Regulations include all of the following, EXCEPT:
A.management of a publicly traded company must publicly disclose that control to all
stakeholders in the firm.
B. Insurance companies must retain sufficient capital to ensure that policyholder
obligations are met.
C. Corporations must fairly and accurately report on the financial condition of the firm to
all stakeholders.
D. Restaurant employees must wash their hands every time they use the restroom. -
CORRECT ANSWER✔✔D
One of the key department players in compliance program implementation is Internal
Audit. As such, the main responsibility of Internal Audit involves which of the following?
,A. Compliance with employment laws
B. Employee health and safety
C. Oversight of financial compliance
D. Product safety and environmental control - CORRECT ANSWER✔✔C
Tom is the Chief Underwriting Officer (CUO) of a large commercial insurance carrier
and has been tasked with updating the current compliance program. The internal audit
results for the past few years have been poor and highlight a need for immediate
correction in certain functional areas. Instead of modifying the current program, Tom
decides to start from scratch and build a new, ground-up program. What is a
fundamental component Tom should be implementing to ensure his company's
compliance program is effective?
A. Use due diligence to prevent and detect criminal behavior.
B. Reference the U.S. Sentencing Commission's Guidelines manual for ideas.
C. Consult with his CUO peers at competitor firms who have had success in this area.
D. Conduct his own internal audit to see the laws the employees are following. -
CORRECT ANSWER✔✔A
All of the following are true regarding the Federal Sentencing Guidelines, EXCEPT:
A. They can be used by federal courts.
B. They are mandatory.
C. They require an organization to have written standards and procedures.
D. They establish minimum components for an effective compliance program. -
CORRECT ANSWER✔✔B
There are four major objectives of a compliance program. Which one of the following
would not be considered an objective?
A. Provide assurance to key stakeholders that the firm is in compliance with all laws,
regulations and policies
B. Receive benefits from external sources for having an effective compliance program
such as regulatory approval
C. Create a culture that encourages compliance and oversight within the firm
D. Notifying the United States Sentencing Commission of all reported incidents -
CORRECT ANSWER✔✔D
Which one of the following regulatory approaches provides an organization with more
certainty and greater predictability?
A. Principles-based
B. Risk-based
C. Evidence-based
D. Rules-based - CORRECT ANSWER✔✔D
, Which one of the following regulatory approaches allocates resources based on the
concept of achieving the greatest potential good while simultaneously minimizing the
overall costs?
A. Performance-based regulation
B. Risk-based regulation
C. Evidence-based regulation
D. Rules-based regulation - CORRECT ANSWER✔✔B
Which one of the following statements about standards—risk management, Solvency II,
and Basel II and III— is true?
A. The Basel II and Basel III standards apply to all European corporations no matter the
sector of the economy in which the corporation operates.
B. The Solvency II standards were approved by the U.S. Congress and now must be
satisfied by all U.S. insurers.
C. Many risk management standards, such as ISO 31000, are voluntary.
D. The Solvency II standards were promulgated to strengthen U.S. regulation and
supervision of the banking sector. - CORRECT ANSWER✔✔C
Sims Cinnamon Rolls and Donuts creates confectionery masterpieces for business
conventions. Knowing how much a warm cinnamon roll or fresh donut means to a
conventioneer just arriving from out of town, Sims' decides to implement a standard that
100% of its orders be delivered 60 minutes before the start of each convention. This is
an example of which of the following kinds of compliance requirements?
A. External and Mandatory
B. External and Voluntary
C. Internal and Mandatory
D. Internal and Voluntary - CORRECT ANSWER✔✔D
The individual responsible for ensuring compliance within an organization usually
reports to which one of the following?
A. Operations management
B. General counsel
C. Senior management
D. Human resources - CORRECT ANSWER✔✔C
Disaster recovery planning arose from the increasing use of and dependency on
A. High-rise construction.
B. International travel.
C. Global financial institutions.
D. Technology. - CORRECT ANSWER✔✔D
VERSIONS QUESTIONS WITH CORRECT
ANSWERS GRADED A+
Which one of the following standards was developed in response to the financial crisis
that began in 2007?
A. Basel III
B. ISO 31000
C. Capital Adequacy Framework
D. Solvency II - CORRECT ANSWER✔✔A
The Federal Sentencing Guidelines require a senior manager to have responsibility for
the organization's entire compliance program. The individual selected is typically from
which one of the following functions of the organization?
A. Internal audit
B. Operations
C. Human development
D. Legal - CORRECT ANSWER✔✔A
The Chief Compliance Officer's responsibilities include all of the following, EXCEPT:
A. Being the legal expert on employment laws
B. Promoting education of compliance requirements
C. Monitoring compliance programs
D. Acting as a liaison for compliance issues - CORRECT ANSWER✔✔A
Which one of the following is an example of a principles-based traffic control regulation?
A. Driver and passengers must wear a safety belt when the car is in motion
B. Driver must maintain a reasonable following distance appropriate to speed and
conditions
C. Driver must maintain liability insurance that meets the state minimum financial
responsibility limit
D. Driver must drive at a speed within the posted speed limit - CORRECT ANSWER✔
✔B
Which one of the following statements is true regarding Basel III?
A. Basel III is a voluntary standard for the insurers which encourages senior
management to take the lead in establishing a strong risk management culture.
,B. Basel III was developed to reduce the likelihood of insurer insolvency, market
disruption, and consumer loss.
C. Basel III was developed to address both the risk of individual organizations and
systemic risk in the banking sector.
D. Basel III is a regulatory standard for banks of the European Union and the United
Kingdom - CORRECT ANSWER✔✔C
When comparing principles-based regulation with rules-based regulation, which one of
the following statements is correct?
A. Principles-based regulation requires less communication between the regulator and
regulated entity.
B. Principles-based regulation tends to use a one-size-fits-all approach.
C. Principles-based regulation responds more quickly to a changing environment.
D. Principles-based regulation emphasizes conformity rather than the outcome. -
CORRECT ANSWER✔✔C
The Sarbanes-Oxley Compliance (SOX) category involves all of the following
compliance levels, EXCEPT:
A. External
B. Mandatory
C. Internal
D. Voluntary - CORRECT ANSWER✔✔D
Solvency II is a regulatory standard that should reduce the likelihood of insolvency,
market disruption, and consumer loss in which one of the following industries?
A. Insurance
B. Automobile
C. Banking
D. Health care - CORRECT ANSWER✔✔A
Examples of Principles-Based Regulations include all of the following, EXCEPT:
A.management of a publicly traded company must publicly disclose that control to all
stakeholders in the firm.
B. Insurance companies must retain sufficient capital to ensure that policyholder
obligations are met.
C. Corporations must fairly and accurately report on the financial condition of the firm to
all stakeholders.
D. Restaurant employees must wash their hands every time they use the restroom. -
CORRECT ANSWER✔✔D
One of the key department players in compliance program implementation is Internal
Audit. As such, the main responsibility of Internal Audit involves which of the following?
,A. Compliance with employment laws
B. Employee health and safety
C. Oversight of financial compliance
D. Product safety and environmental control - CORRECT ANSWER✔✔C
Tom is the Chief Underwriting Officer (CUO) of a large commercial insurance carrier
and has been tasked with updating the current compliance program. The internal audit
results for the past few years have been poor and highlight a need for immediate
correction in certain functional areas. Instead of modifying the current program, Tom
decides to start from scratch and build a new, ground-up program. What is a
fundamental component Tom should be implementing to ensure his company's
compliance program is effective?
A. Use due diligence to prevent and detect criminal behavior.
B. Reference the U.S. Sentencing Commission's Guidelines manual for ideas.
C. Consult with his CUO peers at competitor firms who have had success in this area.
D. Conduct his own internal audit to see the laws the employees are following. -
CORRECT ANSWER✔✔A
All of the following are true regarding the Federal Sentencing Guidelines, EXCEPT:
A. They can be used by federal courts.
B. They are mandatory.
C. They require an organization to have written standards and procedures.
D. They establish minimum components for an effective compliance program. -
CORRECT ANSWER✔✔B
There are four major objectives of a compliance program. Which one of the following
would not be considered an objective?
A. Provide assurance to key stakeholders that the firm is in compliance with all laws,
regulations and policies
B. Receive benefits from external sources for having an effective compliance program
such as regulatory approval
C. Create a culture that encourages compliance and oversight within the firm
D. Notifying the United States Sentencing Commission of all reported incidents -
CORRECT ANSWER✔✔D
Which one of the following regulatory approaches provides an organization with more
certainty and greater predictability?
A. Principles-based
B. Risk-based
C. Evidence-based
D. Rules-based - CORRECT ANSWER✔✔D
, Which one of the following regulatory approaches allocates resources based on the
concept of achieving the greatest potential good while simultaneously minimizing the
overall costs?
A. Performance-based regulation
B. Risk-based regulation
C. Evidence-based regulation
D. Rules-based regulation - CORRECT ANSWER✔✔B
Which one of the following statements about standards—risk management, Solvency II,
and Basel II and III— is true?
A. The Basel II and Basel III standards apply to all European corporations no matter the
sector of the economy in which the corporation operates.
B. The Solvency II standards were approved by the U.S. Congress and now must be
satisfied by all U.S. insurers.
C. Many risk management standards, such as ISO 31000, are voluntary.
D. The Solvency II standards were promulgated to strengthen U.S. regulation and
supervision of the banking sector. - CORRECT ANSWER✔✔C
Sims Cinnamon Rolls and Donuts creates confectionery masterpieces for business
conventions. Knowing how much a warm cinnamon roll or fresh donut means to a
conventioneer just arriving from out of town, Sims' decides to implement a standard that
100% of its orders be delivered 60 minutes before the start of each convention. This is
an example of which of the following kinds of compliance requirements?
A. External and Mandatory
B. External and Voluntary
C. Internal and Mandatory
D. Internal and Voluntary - CORRECT ANSWER✔✔D
The individual responsible for ensuring compliance within an organization usually
reports to which one of the following?
A. Operations management
B. General counsel
C. Senior management
D. Human resources - CORRECT ANSWER✔✔C
Disaster recovery planning arose from the increasing use of and dependency on
A. High-rise construction.
B. International travel.
C. Global financial institutions.
D. Technology. - CORRECT ANSWER✔✔D
