ARM 400 Practice Exams - all chapters!!!!

ARM 400 Practice Exams - all chapters!!!! According to the law of large numbers, as the number of exposure units insured increases, - The relative accuracy of predictions about future losses increases The fundamental purpose of a risk management framework is to - Integrate risk management throughout the organization Which one of the following provides a measure of the maximum potential damage associated with an occurrence? - Exposure Aligning risks with the organization's risk appetite defines - Tolerable uncertainty An organization must meet the standard of care that it owes to others in order to ensure that - Legal obligations are satisfied Julian was having a conversation with Tania, one of his employees. At this point, Julian said, "What I hear you say is that you would like to take on more responsibility. Is that correct?" Which one of the following elements of active listening was Julian illustrating? - Response During the past year, International Toys has undertaken four capital projects. The company has renovated and refurbished one of its aging warehouse buildings. It has purchased the most recent version of its current order processing computer software. It has added two trucks to its fleet of delivery vehicles. Lastly, it has purchased a new production machine that will allow it to launch a new product line. Which one of the following company projects is the most speculative risk? - The new production machine Encouraging the expression of feelings as well as facts and following up with employees on the problems they report are two ways that managers and supervisors can - Cultivate two-way communication Which one of the following risk management objectives is critical for a manufacturer seeking new capital from investors, stockholders, and creditors? - Reduce the deterrent effects of hazard risks Which one of the following is a tool that can be used by fraud investigators to compare documents and analyze notes? - Text mining For an organization, a key performance indicator (KPI) measures the performance of a specific activity at a predetermined level or amount. Which one of the following is an example of a KRI based on a ratio? - Inventory turnover Before speaking with a group or individual, the speaker should think about what he or she wants the other person(s) to do as a result of the conversation. Which one of the following steps in the communication process does the speaker complete by doing this? - Set a clear communication objective Mid-State Packing Company, a meat processing company, is the largest private sector employer in Metro City. First National Bank of Metro City loans money to Mid-State Packaging Company and to many of the employees of Mid-State. The problem with First National Bank of Metro City loaning money to both the business and many employees of the business is that - Loan defaults are likely to be highly correlated Which one of the following statements is true with regard to preventative analytics? - Preventative analytics uses smart products and data analytics to identify root loss causes and their implications. 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 - connected ecosystem In addition to metal detector, many airports have installed a second type of scanning technology for 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? - Biochemical sensors Which one of the following uses infrared light to detect nearby objects? - Lidar SIR's use of drones, video, real-term video scanning, and computer analysis illustrates which one of the following? - Preventative analytics Which one of the following should be part of an organization's standard operating procedures (SOPs) concerning external stakeholder communications? - Instructions regarding what types of information can and cannot be released When interviewing a risk owner, which one of the following questions should be asked? - What steps have been taken to ensure continuity of business in the event of a natural disaster? A speaker imparts information in verbal communications by - Having good listening skills and expressing facts and emotions through words and sometimes visual displays Which one of the following organizational policies or practices is based on a code of ethics? - A disclosure requirement regarding any potential conflict of interest an accountant might have in working with specific clients An organization evaluates key stakeholders' attitude toward risk in order to - Understand what risks are acceptable and to develop an effective enterprise-wide risk management program Twice a year, Medford Factory gives employees a day off to work in the community where the factory is located. The employees prepare and serve a holiday meal for members of the community, and they clean the neighborhood park in the spring. This practice is based on Medford Factory's - Social responsibility Which one of the following types of risk is best handled at the risk center level? - Minor risks that do not have consequences outside the unit are best managed at the risk center level Which one of the following statements is correct regarding an organizations code of ethics? - The code of ethics should include principles and concepts that are dynamic enough to remain relevant in a rapidly changing business environment One advantage that a national organization would derive from creating risk centers is that it - Allows for participation by operational