ARM 401 PRACTICE EXAM QUESTIONS
WITH VERIFIED CHOICE ANSWERS
HIGH YIELD QUESTIONS WITH CORRECT ANSWERS
DESIGNED TO MIRROR THE LATEST ARM 401 PRACTICE EXAM
FEATURES INCLUDE
❖ CHOICE ANSWERS
❖ VERIFIED ANSWERS
❖ GRADED A+
,QUESTIONS ANSWERS
A risk map showing a large difference between inherent and residual risk C
indicates which one of the following?
A. The risk is within the organization's risk appetite
B. The current risk treatment is ineffective
C. The current risk treatment is effective
D. The risk does not need to be treated
Lucas, a risk professional for Jones Incorporated, recently met with experts B
from the utility industry to discuss the potential loss of supply and risks to
the infrastructure. Lucas must now decide which risks, and proposed
treatments, need to be communicated to the board of Jones Incorporated.
Lucas should make this decision based on
A. The supply source involved.
B. The organization's risk appetite and tolerance levels.
C. Whether the risk in natural or man-made.
D. Whether any government regulations are involved or not.
SoCal Movie Company produces movies at a studio in Southern California. B
The risk manager decided to identify the range of potential consequences
associated with various risks that the company faces. For example, if a
severe earthquake occurred while the company was filming a movie, there
could be deaths and injuries, destruction of movie sets, delays in
production, costs associated with filming at an alternative location, and loss
of reputation and good will. The type of analysis performed by the risk
manager is called
A. SWOT analysis.
B. Scenario analysis.
C. Sensitivity analysis.
D. HAZOP analysis.
Insurance Company (IC) sells its coverages through independent insurance D
agents. Independent agents represent several insurance companies. Tom,
the president of IC, has learned that the independent agent who is the
highest producer for IC is considering selling his agency. IC is considering
acquiring the agency since Tom is concerned that if the agency is sold, IC
may lose a substantial amount of business. Tom asked IC's risk manager to
analyze the prospective purchase. The analysis revealed that the acquisition
would likely secure most of IC's book of business with the agency but also
revealed local competitors that would try to place the business as well. In
addition, the analysis revealed the opportunity for IC to move some
accounts currently placed with other insurers over to IC. Also, it was
learned that a competitor expressed an interest in the agency acquisition.
The analysis performed by the risk manager is a form of
A. Decision tree analysis.
B. HAZOP analysis.
C. Risk map analysis.
D. SWOT analysis.
Murray Trucking is interested in evaluating which risk factors are most C
likely to lead to the most costly accidents. They are evaluating risk factors
such as speed, weather conditions, driver experience, distance traveled, and
, gross vehicle weight. Which one of the following statistical measurements
would be useful for the risk manager when calculating the probability of
the different risk factors causing severe accidents?
A. Telematics
B. Inverse covariance
C. Variance
D. Monte Carlo simulation
Blithe Manufacturing has experienced a drop in market share. The C
marketing department has come up with a way to differentiate their
product in order to regain market share. Blithe has assembled a team of
individuals representing different organizational functions to analyze both
internal and external factors of the new product and decide whether or not
it is feasible. Which one of the following team approaches to risk
identification is Blithe using?
A. Delphi technique
B. HAZOP workshop
C. SWOT analysis
D. Scenario analysis
William is a project manager for Parker International. He has been B
assigned a key project with a short deadline. William realizes that this
project is going to require revising the job duties of some individuals and a
collaborative effort from of all team members. When revising job duties,
William should do which one of the following?
A. Overload some individuals with more work than others
B. Try to enrich individuals' work rather than merely expand it
C. Rely on the most senior individuals to take on additional duties
D. Focus on the individuals' personality rather than results
Shelton Manufacturing executives are growing increasingly concerned B
about wildfires and the potential effects on supply chain management. As
the risk professional, Carla has been asked to meet with experts on the
subject and report back to the executive team. Which one of the following
should Carla do before meeting with external wildfire experts?
A. Carla should speak with internal subject-matter experts in hopes that
she can avoid needing the external wildfire experts.
B. Carla should research the field and get a working understanding of
wildfires.
C. Carla should solicit questions from internal experts and submit them to
the external wildfire experts.
D. Carla should try to learn as much as possible about wildfires, so she can
impress the wildfire experts.
An organization practicing holistic risk management would assess the cost B
of raw materials and foreign exchange risk under which one of the
following quadrants of risk?
A. Strategic risk
B. Financial risk
C. Operational risk
D. Hazard risk
Risk maps differ from other risk assessment tools and techniques in which B
one of the following ways?
A. Risk maps dissect processes within the organization from input to
WITH VERIFIED CHOICE ANSWERS
HIGH YIELD QUESTIONS WITH CORRECT ANSWERS
DESIGNED TO MIRROR THE LATEST ARM 401 PRACTICE EXAM
FEATURES INCLUDE
❖ CHOICE ANSWERS
❖ VERIFIED ANSWERS
❖ GRADED A+
,QUESTIONS ANSWERS
A risk map showing a large difference between inherent and residual risk C
indicates which one of the following?
A. The risk is within the organization's risk appetite
B. The current risk treatment is ineffective
C. The current risk treatment is effective
D. The risk does not need to be treated
Lucas, a risk professional for Jones Incorporated, recently met with experts B
from the utility industry to discuss the potential loss of supply and risks to
the infrastructure. Lucas must now decide which risks, and proposed
treatments, need to be communicated to the board of Jones Incorporated.
Lucas should make this decision based on
A. The supply source involved.
B. The organization's risk appetite and tolerance levels.
C. Whether the risk in natural or man-made.
D. Whether any government regulations are involved or not.
SoCal Movie Company produces movies at a studio in Southern California. B
The risk manager decided to identify the range of potential consequences
associated with various risks that the company faces. For example, if a
severe earthquake occurred while the company was filming a movie, there
could be deaths and injuries, destruction of movie sets, delays in
production, costs associated with filming at an alternative location, and loss
of reputation and good will. The type of analysis performed by the risk
manager is called
A. SWOT analysis.
B. Scenario analysis.
C. Sensitivity analysis.
D. HAZOP analysis.
Insurance Company (IC) sells its coverages through independent insurance D
agents. Independent agents represent several insurance companies. Tom,
the president of IC, has learned that the independent agent who is the
highest producer for IC is considering selling his agency. IC is considering
acquiring the agency since Tom is concerned that if the agency is sold, IC
may lose a substantial amount of business. Tom asked IC's risk manager to
analyze the prospective purchase. The analysis revealed that the acquisition
would likely secure most of IC's book of business with the agency but also
revealed local competitors that would try to place the business as well. In
addition, the analysis revealed the opportunity for IC to move some
accounts currently placed with other insurers over to IC. Also, it was
learned that a competitor expressed an interest in the agency acquisition.
The analysis performed by the risk manager is a form of
A. Decision tree analysis.
B. HAZOP analysis.
C. Risk map analysis.
D. SWOT analysis.
Murray Trucking is interested in evaluating which risk factors are most C
likely to lead to the most costly accidents. They are evaluating risk factors
such as speed, weather conditions, driver experience, distance traveled, and
, gross vehicle weight. Which one of the following statistical measurements
would be useful for the risk manager when calculating the probability of
the different risk factors causing severe accidents?
A. Telematics
B. Inverse covariance
C. Variance
D. Monte Carlo simulation
Blithe Manufacturing has experienced a drop in market share. The C
marketing department has come up with a way to differentiate their
product in order to regain market share. Blithe has assembled a team of
individuals representing different organizational functions to analyze both
internal and external factors of the new product and decide whether or not
it is feasible. Which one of the following team approaches to risk
identification is Blithe using?
A. Delphi technique
B. HAZOP workshop
C. SWOT analysis
D. Scenario analysis
William is a project manager for Parker International. He has been B
assigned a key project with a short deadline. William realizes that this
project is going to require revising the job duties of some individuals and a
collaborative effort from of all team members. When revising job duties,
William should do which one of the following?
A. Overload some individuals with more work than others
B. Try to enrich individuals' work rather than merely expand it
C. Rely on the most senior individuals to take on additional duties
D. Focus on the individuals' personality rather than results
Shelton Manufacturing executives are growing increasingly concerned B
about wildfires and the potential effects on supply chain management. As
the risk professional, Carla has been asked to meet with experts on the
subject and report back to the executive team. Which one of the following
should Carla do before meeting with external wildfire experts?
A. Carla should speak with internal subject-matter experts in hopes that
she can avoid needing the external wildfire experts.
B. Carla should research the field and get a working understanding of
wildfires.
C. Carla should solicit questions from internal experts and submit them to
the external wildfire experts.
D. Carla should try to learn as much as possible about wildfires, so she can
impress the wildfire experts.
An organization practicing holistic risk management would assess the cost B
of raw materials and foreign exchange risk under which one of the
following quadrants of risk?
A. Strategic risk
B. Financial risk
C. Operational risk
D. Hazard risk
Risk maps differ from other risk assessment tools and techniques in which B
one of the following ways?
A. Risk maps dissect processes within the organization from input to
