ARM 401: Holistically Assessing Risk UPDATED ACTUAL Questions and
CORRECT Answers
1. predictive model- vastly more and better data, coupled with newer, sophisticated software tools that
ing analyze, extrapolate, and predict outcomes.
2. Covariance the measure of how two random risk variables will change in relation to each
other, and it's used to calculate the correlation (linear relationship) between the
variables.
3. Variance the spread of the data set—or how far apart the numbers are in relation to the
mean (average).
4. Facilitated Work- a neutral party (the facilitator), who has no stake in the outcome or participation
shops responsibilities, administers the risk workshop and propels the group to achieve
its goal.
5. Delphi Technique uses the opinions of a select group of experts to identify risks. Typically, these
experts don't meet but respond to a survey or inquiry instead.
6. Scenario Analysis identifies risks and predicts the potential consequences of those specific risks.
- idenities scenarios if a particular risk were to occur.
7. HAZOP a comprehensive review of a process or system
- A team of subject matter experts and stakeholders identifies the risks associated
with a given process and recommends a solution.
- derived from hazard and operability study
8. SWOT Analysis team approach that's useful in analyzing a new project or product.
- strengths and weaknesses are internal environmental factors to be considered
- opportunities and threats are external environmental factors.
9. Checklists easy to use and communicate known risks to employees with little effort
- a list of tasks that need accomplished
10. Workshops format allows attendees to brainstorm and assess risks in an open, collaborative
forum
,11. risk register essentially a ledger of identified risks, which are recorded in a table within a text
document, spreadsheet, or database.
- might include dates, descriptions of each risk, the type of each risk, the likelihood
of each risk taking place, the potential severity of each risk, controls that might be
employed to counteract the risk, and the party responsible for executing those
controls.
12. risk map a graphic diagram showing the components of the register
- identify, prioritize, and quantify risks in a two-dimensional pictorial that illustrates
frequency and severity on vertical and horizontal axes.
13. Process Flow dissects processes within the organization from input to output for the purpose
Analysis of improving them.
14. Cause and Effect identifies the possible reasons, direct and contributory, that caused a negative
Analysis event or problem.
- combines brainstorming, communications, and mapping in an effort to find the
cause of a problem and the solution.
15. Fault Tree Analy- a process that originates with an assumption about what caused an event or a
sis failure.
- Working downward from the assumption (the top event), a diagram is used to
connect the factors that caused the failure and determine how to devise methods
to prevent similar failures in the future.
16. Failure Mode and a team of individuals to examine a process and identify potential failures at each
Effects Analysis step in the process, as well as the consequences of each failure.
17. Sensor A device that detects and measures stimuli in its environment.
18. Radio frequen- A technology that uses radio frequency to identify objects.
cy identification
(RFID)
, 19. Artificial intelli- Computer processing or output that simulates human reasoning or knowledge.
gence (AI)
20. Computer vision A technology that simulates human vision.
21. Risk appetite Amount of risk an organization is willing to take on in order to achieve an
anticipated result or return.
22. Inherent risk The level of risk that would be faced if it were to remain untreated or no action
were to be taken to alter the level of risk.
23. Residual risk The level of risk remaining after actions are taken to alter the level of risk.
24. Optimum risk The level of risk that is within an organization's risk appetite.
25. three keys to ef- gaining a holistic perspective, motivating workers, and contributing toward a
fective collabo- common goal.
ration
26. Qualitative analy- measures a risk by the significance of consequences
sis - may use such ratings as high, medium, and low.
27. Quantitative assigns specific values to consequences and their probabilities to reach a numeric
analysis indication of the level of risk
28. Risk control A conscious act or decision not to act that reduces the frequency and/or severity
of losses or makes losses more predictable.
29. Sequence of Says these 5 factors lead to accident or injury:
Events (Domino 1. Ancestry and social environment, such as inherited psychological disorders and
Theory) dysfunctional social environments
2. Fault of person, such as impulsiveness, violent temper, nervousness, or a refusal
to adapt to safe practices
CORRECT Answers
1. predictive model- vastly more and better data, coupled with newer, sophisticated software tools that
ing analyze, extrapolate, and predict outcomes.
2. Covariance the measure of how two random risk variables will change in relation to each
other, and it's used to calculate the correlation (linear relationship) between the
variables.
3. Variance the spread of the data set—or how far apart the numbers are in relation to the
mean (average).
4. Facilitated Work- a neutral party (the facilitator), who has no stake in the outcome or participation
shops responsibilities, administers the risk workshop and propels the group to achieve
its goal.
5. Delphi Technique uses the opinions of a select group of experts to identify risks. Typically, these
experts don't meet but respond to a survey or inquiry instead.
6. Scenario Analysis identifies risks and predicts the potential consequences of those specific risks.
- idenities scenarios if a particular risk were to occur.
7. HAZOP a comprehensive review of a process or system
- A team of subject matter experts and stakeholders identifies the risks associated
with a given process and recommends a solution.
- derived from hazard and operability study
8. SWOT Analysis team approach that's useful in analyzing a new project or product.
- strengths and weaknesses are internal environmental factors to be considered
- opportunities and threats are external environmental factors.
9. Checklists easy to use and communicate known risks to employees with little effort
- a list of tasks that need accomplished
10. Workshops format allows attendees to brainstorm and assess risks in an open, collaborative
forum
,11. risk register essentially a ledger of identified risks, which are recorded in a table within a text
document, spreadsheet, or database.
- might include dates, descriptions of each risk, the type of each risk, the likelihood
of each risk taking place, the potential severity of each risk, controls that might be
employed to counteract the risk, and the party responsible for executing those
controls.
12. risk map a graphic diagram showing the components of the register
- identify, prioritize, and quantify risks in a two-dimensional pictorial that illustrates
frequency and severity on vertical and horizontal axes.
13. Process Flow dissects processes within the organization from input to output for the purpose
Analysis of improving them.
14. Cause and Effect identifies the possible reasons, direct and contributory, that caused a negative
Analysis event or problem.
- combines brainstorming, communications, and mapping in an effort to find the
cause of a problem and the solution.
15. Fault Tree Analy- a process that originates with an assumption about what caused an event or a
sis failure.
- Working downward from the assumption (the top event), a diagram is used to
connect the factors that caused the failure and determine how to devise methods
to prevent similar failures in the future.
16. Failure Mode and a team of individuals to examine a process and identify potential failures at each
Effects Analysis step in the process, as well as the consequences of each failure.
17. Sensor A device that detects and measures stimuli in its environment.
18. Radio frequen- A technology that uses radio frequency to identify objects.
cy identification
(RFID)
, 19. Artificial intelli- Computer processing or output that simulates human reasoning or knowledge.
gence (AI)
20. Computer vision A technology that simulates human vision.
21. Risk appetite Amount of risk an organization is willing to take on in order to achieve an
anticipated result or return.
22. Inherent risk The level of risk that would be faced if it were to remain untreated or no action
were to be taken to alter the level of risk.
23. Residual risk The level of risk remaining after actions are taken to alter the level of risk.
24. Optimum risk The level of risk that is within an organization's risk appetite.
25. three keys to ef- gaining a holistic perspective, motivating workers, and contributing toward a
fective collabo- common goal.
ration
26. Qualitative analy- measures a risk by the significance of consequences
sis - may use such ratings as high, medium, and low.
27. Quantitative assigns specific values to consequences and their probabilities to reach a numeric
analysis indication of the level of risk
28. Risk control A conscious act or decision not to act that reduces the frequency and/or severity
of losses or makes losses more predictable.
29. Sequence of Says these 5 factors lead to accident or injury:
Events (Domino 1. Ancestry and social environment, such as inherited psychological disorders and
Theory) dysfunctional social environments
2. Fault of person, such as impulsiveness, violent temper, nervousness, or a refusal
to adapt to safe practices
