ARM 401 Exam Practice Exam Questions And Answers

A. Strategic risk B. Financial risk C. Operational risk D. Hazard risk - correct answer--B Risk maps differ from other risk assessment tools and techniques in which one of the following ways? A. Risk maps dissect processes within the organization from input to output for the purpose of improving them. B. Risk maps identify, prioritize, and quantify risks in a two-dimensional pictorial that illustrates frequency and severity on vertical and horizontal axes. C. Risk maps have the potential to identify both negative risks and opportunity risks. D. Risk maps are able to quickly explore a vast number of possible outcomes based on large datasets. - correct answer--B As a best practice, a risk register should be an interactive computer system. Which one of the following individuals should be responsible for continually updating risk information? A. Customer B. Risk management professional C. Risk owner D. Chief executive officer - correct answer--C 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 is called a A. Risk report. B. Risk map. C. Risk matrix. D. Risk register. - correct answer--D Which one of the following risk assessment tools has the potential to identify both negative risks and opportunity risks? A. Risk maps B. Audits C. Cause and effect analysis D. Failure mode and effects analysis - correct answer--B Emma is a risk management professional at a chemical engineering organization. A new process is being designed and Emma has been told that all risks must be identified and eliminated during the design stage. Emma is a risk management professional, but not a chemical engineering expert. She has assembled a team of engineering experts and stakeholders to identify the risk associated with the process by subdividing the process into components and reviewing each component and then recommend solutions. Which one of the following team approaches to risk identification has Emma chosen? A. Delphi technique B. SWOT analysis C. Scenario analysis D. HAZOP approach - correct answer--D Cotton Products Company manufactures cotton clothing, towels, sheets, and other cotton products. All production takes place at one large multi-acre production facility. The risk manager of Cotton Products Company called a meeting attended by her staff, the plant foreman, the plant safety engineer, and the head of operations. She told the group that she wanted to analyze one problem-the top event-a catastrophic fire at the production facility. The group discussed all the causes of failure and factors that could contribute to the top event. The causes of the -top event- were listed, and methods of reducing the likelihood and consequences of the event were examined. The technique the risk manager employed is called A. Failure mode and effects analysis (FMEA). B. SWOT analysis. C. Scenario analysis. D. Fault tree analysis (FTA). - correct answer--D Home Appliance Company has decided to change its production method. Previously, small teams of workers assembled washers, dryers, and dishwashers. Under the new production method, an assembly-line will be used, with some functions performed by robotics. Before making the change, Home Appliance Company has created a team of experts from company personnel to identify all of the risks inherent in the new production method and to recommend measures to address these risks. The team will assemble in a facilitated workshop and follow these steps: Divide the production method into components Review each component to identify risk Identify causes and potential outcomes for each risk Develop a solution for each risk. This team approach is risk identification is called a A. SWOT (strengths, weaknesses, opportunities, threats) analysis. B. Delphi technique. C. Facilitated workshop. D. Hazard and operability (HAZOP) study. - correct answer--D SE Industries has identified windstorm as a risk. The risk manager has assembled a team to project the potential consequences of windstorm. The team includes individuals from various functions within the organization. Which one of the following team approaches to risk identification is SE Industries using? A. Delphi technique B. Scenario analysis