ARM 400 Questions With Correct Answers
Which one of the following statements is true regarding the evolution of risk and risk
management? the definition of risk has evolved to include positive as well as negative
attributes
Risk management professionals must collaborate with data analysts during which two steps of
the risk management process? analyze risk and monitor risk treatments
Jane always drives to visit her children who live 1,000 miles away. She enjoys driving and feels
safer in a vehicle than on an airplane because she feels she has more control of her fate. The
driving versus flying decision is an example of: subjective risk
_______________ enhances an organizations reputation social responsibility
Samuel was recently hired as a risk management professional for Parker Property Management.
He has been asked by senior management to review the organizations current insurance policies
to make sure that the organization is adequately protected, and also see if there are any
opportunities to save on the premiums. Samuel must do which of the following through internal
communication before he will be able to complete the task? determine the organizations
risk appetite
Billy owns a beach front cottage which has become his primary residence. Billy's primary
concern is that his home will be hit by a hurricane and badly damaged or even destroyed. For
Billy, this hurricane risk is a... subjective risk
, Risk can be classified as subjective or objective. Which one of the following statements is
correct with respect to these risk classifications? subjective risk can exist even where
objective risk does not
Asking a question such as "How do you think this will work out?" can help a speaker do which
of the following? request feedback and determine if the message has been understood
Which one of the following is an internal source that can often provide information regarding
risks that aren't obvious? internal auditing
(the internal audit function can often provide information regarding risk that aren't obvious, such
as employees creating a risk by not adhering to certain processes)
The fundamental purpose of a risk management framework is to... integrate risk
management throughout the organization
In an effort to grow personal lines book, an insurer decides to offer discounts on homeowners
and personal auto insurance to the employees of its largest business lines account. Which one of
the following risk measures is most likely to increase as a result of this marketing decision?
Correlation
(think law of large numbers)
Which one of the following statements is true regarding the evolution of risk and risk
management? the definition of risk has evolved to include positive as well as negative
attributes
Risk management professionals must collaborate with data analysts during which two steps of
the risk management process? analyze risk and monitor risk treatments
Jane always drives to visit her children who live 1,000 miles away. She enjoys driving and feels
safer in a vehicle than on an airplane because she feels she has more control of her fate. The
driving versus flying decision is an example of: subjective risk
_______________ enhances an organizations reputation social responsibility
Samuel was recently hired as a risk management professional for Parker Property Management.
He has been asked by senior management to review the organizations current insurance policies
to make sure that the organization is adequately protected, and also see if there are any
opportunities to save on the premiums. Samuel must do which of the following through internal
communication before he will be able to complete the task? determine the organizations
risk appetite
Billy owns a beach front cottage which has become his primary residence. Billy's primary
concern is that his home will be hit by a hurricane and badly damaged or even destroyed. For
Billy, this hurricane risk is a... subjective risk
, Risk can be classified as subjective or objective. Which one of the following statements is
correct with respect to these risk classifications? subjective risk can exist even where
objective risk does not
Asking a question such as "How do you think this will work out?" can help a speaker do which
of the following? request feedback and determine if the message has been understood
Which one of the following is an internal source that can often provide information regarding
risks that aren't obvious? internal auditing
(the internal audit function can often provide information regarding risk that aren't obvious, such
as employees creating a risk by not adhering to certain processes)
The fundamental purpose of a risk management framework is to... integrate risk
management throughout the organization
In an effort to grow personal lines book, an insurer decides to offer discounts on homeowners
and personal auto insurance to the employees of its largest business lines account. Which one of
the following risk measures is most likely to increase as a result of this marketing decision?
Correlation
(think law of large numbers)
