ARM 400 Risk in an Evolving World 2025 Latest
Exam 170 Questions and Correct Answers / ARM
400 Exam 2025-2026 Practice Qs and As
AMRM Insurance Company sells insurance in Virginia, North Carolina, South
Carolina, and Georgia. The company has compiled a policyowner data base that
can be used to send text messages when hurricanes approach. The company
provides early warnings, storm updates from the National Weather Service, and
hurricane safety measures. The company credits the system with reduced hurricane
claims. The use of the texting system is an example of
A. Artificial intelligence.
B. Preventive analytics.
C. Experience rating.
D. Sensor networks. - ANSWER-B. Preventive analytics.
Which one of the following is a main characteristic of effective key risk indicators
(KRIs)?
A. They define the boundaries of risk tolerance.
B. They are lagging in nature.
C. They are based on quantifiable information.
D. They measure progress toward achieving objectives. - ANSWER-C. They are
based on quantifiable information.
Successful organizations have goals and objectives. A financial or nonfinancial
measurement that defines how successfully an organization is progressing toward
its long-term goals is referred to as
A. An operating standard (OS).
B. A key performance indicator (KPI).
pg. 1
,C. A critical success factor (CSF).
D. An objective gauge (OG). - ANSWER-B. A key performance indicator (KPI).
An organization's goals and objectives are met by establishing and attaining
measurable standards for the many activities it pursues. Which one of the
following statements is correct with respect to those standards?
A. Organizations with key performance indicators (KPIs) established for critical
success factors (CSFs) will typically achieve organizational goals.
B. A key performance indicator (KPI) answers the question, "What will make our
organization a success?"
C. Generally, an organization's risk tolerance has little impact on its critical success
factors (CSFs) and key performance indicators (KPIs).
D. For each key performance indicator (KPI), there is a tolerance level for how
much deviation from the standard established in the KPI will be acceptable. -
ANSWER-D. For each key performance indicator (KPI), there is a tolerance level
for how much deviation from the standard established in the KPI will be
acceptable.
An organization has established a key performance indicator to "reduce employee
injuries by 6%." Which one of the following would indicate a low risk tolerance
for this KPI?
A. Reduce employee injuries by 2%
B. Reduce employee injuries by 4%
C. Reduce employee injuries by 5 to 6%
D. Employee injury rate remains unchanged - ANSWER-C. Reduce employee
injuries by 5 to 6%
The service representatives for Tauton Insurance will be eligible for a bonus only if
the customer retention rate is increased by 5%. This is an example of which one of
the following standards?
pg. 2
,A. A severe risk tolerance level
B. A critical success factor derived from a strategic objective
C. A key performance indicator based on financial ratios
D. A corrective measure linked with an identified tolerance level - ANSWER-D.
A corrective measure linked with an identified tolerance level
Which one of the following statements is true regarding the business process
management (BPM) life cycle model?
A. The model is designed to review one business process at a time.
B. The model is ineffective unless all five steps are completed on a continuous
basis.
C. The model is primarily used by organizations in the manufacturing sector.
D. The model is driven by the collaboration of human and technological input. -
ANSWER-D. The model is driven by the collaboration of human and
technological input.
Which one of the following is an example of an internal key risk indicator (KRI)
that a contractor might monitor?
A. Availability of skilled labor
B. Cost of lumber
C. Budget variances
D. Interest rates - ANSWER-C. Budget variances
Organizations use key risk indicators (KRIs) to plan for and respond to risk. Which
one of the following statements is correct with respect to KRIs?
A. KRIs are based on quantifiable information and support management decisions.
B. To be effective, KRIs should be detailed and specific.
C. To best manage risk, an organization should have as many KRIs as possible.
pg. 3
, D. KRIs are usually only established for the executive level within an organization.
- ANSWER-A. KRIs are based on quantifiable information and support
management decisions.
Which one of the following measures the progress an organization has made
toward attaining its goals within a specific amount of time?
A. Key performance indicator
B. Key risk indicator
C. Critical success factor
D. Risk tolerance level - ANSWER-A. Key performance indicator
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
A. Cultivate two-way communication.
B. Facilitate active listening.
C. Support diverse groups.
D. Maintain control of the conversation. - ANSWER-A. Cultivate two-way
communication.
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?
A. Analyze your audience
B. Set aside judgement
C. Set a clear communication objective
D. Deliver a message the recipient(s) want to hear - ANSWER-C. Set a clear
communication objective
pg. 4
Exam 170 Questions and Correct Answers / ARM
400 Exam 2025-2026 Practice Qs and As
AMRM Insurance Company sells insurance in Virginia, North Carolina, South
Carolina, and Georgia. The company has compiled a policyowner data base that
can be used to send text messages when hurricanes approach. The company
provides early warnings, storm updates from the National Weather Service, and
hurricane safety measures. The company credits the system with reduced hurricane
claims. The use of the texting system is an example of
A. Artificial intelligence.
B. Preventive analytics.
C. Experience rating.
D. Sensor networks. - ANSWER-B. Preventive analytics.
Which one of the following is a main characteristic of effective key risk indicators
(KRIs)?
A. They define the boundaries of risk tolerance.
B. They are lagging in nature.
C. They are based on quantifiable information.
D. They measure progress toward achieving objectives. - ANSWER-C. They are
based on quantifiable information.
Successful organizations have goals and objectives. A financial or nonfinancial
measurement that defines how successfully an organization is progressing toward
its long-term goals is referred to as
A. An operating standard (OS).
B. A key performance indicator (KPI).
pg. 1
,C. A critical success factor (CSF).
D. An objective gauge (OG). - ANSWER-B. A key performance indicator (KPI).
An organization's goals and objectives are met by establishing and attaining
measurable standards for the many activities it pursues. Which one of the
following statements is correct with respect to those standards?
A. Organizations with key performance indicators (KPIs) established for critical
success factors (CSFs) will typically achieve organizational goals.
B. A key performance indicator (KPI) answers the question, "What will make our
organization a success?"
C. Generally, an organization's risk tolerance has little impact on its critical success
factors (CSFs) and key performance indicators (KPIs).
D. For each key performance indicator (KPI), there is a tolerance level for how
much deviation from the standard established in the KPI will be acceptable. -
ANSWER-D. For each key performance indicator (KPI), there is a tolerance level
for how much deviation from the standard established in the KPI will be
acceptable.
An organization has established a key performance indicator to "reduce employee
injuries by 6%." Which one of the following would indicate a low risk tolerance
for this KPI?
A. Reduce employee injuries by 2%
B. Reduce employee injuries by 4%
C. Reduce employee injuries by 5 to 6%
D. Employee injury rate remains unchanged - ANSWER-C. Reduce employee
injuries by 5 to 6%
The service representatives for Tauton Insurance will be eligible for a bonus only if
the customer retention rate is increased by 5%. This is an example of which one of
the following standards?
pg. 2
,A. A severe risk tolerance level
B. A critical success factor derived from a strategic objective
C. A key performance indicator based on financial ratios
D. A corrective measure linked with an identified tolerance level - ANSWER-D.
A corrective measure linked with an identified tolerance level
Which one of the following statements is true regarding the business process
management (BPM) life cycle model?
A. The model is designed to review one business process at a time.
B. The model is ineffective unless all five steps are completed on a continuous
basis.
C. The model is primarily used by organizations in the manufacturing sector.
D. The model is driven by the collaboration of human and technological input. -
ANSWER-D. The model is driven by the collaboration of human and
technological input.
Which one of the following is an example of an internal key risk indicator (KRI)
that a contractor might monitor?
A. Availability of skilled labor
B. Cost of lumber
C. Budget variances
D. Interest rates - ANSWER-C. Budget variances
Organizations use key risk indicators (KRIs) to plan for and respond to risk. Which
one of the following statements is correct with respect to KRIs?
A. KRIs are based on quantifiable information and support management decisions.
B. To be effective, KRIs should be detailed and specific.
C. To best manage risk, an organization should have as many KRIs as possible.
pg. 3
, D. KRIs are usually only established for the executive level within an organization.
- ANSWER-A. KRIs are based on quantifiable information and support
management decisions.
Which one of the following measures the progress an organization has made
toward attaining its goals within a specific amount of time?
A. Key performance indicator
B. Key risk indicator
C. Critical success factor
D. Risk tolerance level - ANSWER-A. Key performance indicator
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
A. Cultivate two-way communication.
B. Facilitate active listening.
C. Support diverse groups.
D. Maintain control of the conversation. - ANSWER-A. Cultivate two-way
communication.
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?
A. Analyze your audience
B. Set aside judgement
C. Set a clear communication objective
D. Deliver a message the recipient(s) want to hear - ANSWER-C. Set a clear
communication objective
pg. 4
