ARM 401 Miscellaneous UPDATED ACTUAL Questions and CORRECT
Answers
1. B. Indenture lev- Air-Freight Company wants to use failure mode and effects analysis (FMEA) to
els analyze its systems, subsystems, components, sub-assemblies, and parts. Level 1
is the overall system for shipping freight. Level 2 is the system segments, with the
prime items (air freight hubs, schedulers, and logistics) designated as Level 3.
Level 4 is the subsystems (local freight handlers, package sorters, etc.). Level 5 is
the hardware and parts (forklifts, conveyor belts, planes, and delivery vans, etc.).
In FMEA, these various systems and subsystems are called
A. Critical levels.
B. Indenture levels.
C. Complexity levels.
D. Risk priority levels.
2. A. One way of Which one of the following statements is correct with respect to continuous prob-
presenting a con- ability distributions?
tinuous probabil- A. One way of presenting a continuous probability distribution is to divide the
ity distribution is distribution into a countable number of bins.
to divide the dis- B. There are a finite number of possible outcomes in a continuous probability
tribution into a distribution.
countable num- C. They are typically used for loss frequency analysis rather than severity analysis.
ber of bins. D. They are most effectively illustrated using tables and pie charts.
3. B. To perpetu- Which one of the following is a major responsibility of corporate directors?
ate a competent A. To manage investments and disbursements of the corporation's assets
board through B. To perpetuate a competent board through regular elections
regular elections C. To establish the procedures and operational goals for each department
D. To create the proper annual and interim reports for shareholders
4. D. The risk treat- The risk management department at Computer Hardware Company uses risk maps
ment opportuni- to graph and analyze the risks faced by the company. One area of special concern
ty to further re- to the risk management team is the difference between residual risk and optimum
duce risk. risk. This difference represents
A. The risk that cannot be altered and is retained by the firm.
, B. The potential risk that the organization does not currently face, but could face if
conditions change
C. The risk that is handled, by default, through avoidance.
D. The risk treatment opportunity to further reduce risk.
5. A. Purpose. Decision tree analysis and event tree analysis are similar in a number of ways, but
differ in their
A. Purpose.
B. Process.
C. Appearance.
D. Approach.
6. A. The Delphi After a month in which three employees were seriously injured at company paper
technique. mills, Ashley, the risk manager of Bright White Paper Company, wanted some
answers about the causes of employee injuries. Ashley independently contacted
the plant manager and foreman at each of the company's plants. She asked each
person to complete a confidential questionnaire regarding safety procedures. After
receiving the responses to the questionnaire, Ashley summarized the results and
asked the same questions again instructing each person to consider revising their
responses based on the initial questionnaire results. The analysis revealed that
new workers were not being properly trained and that a lax attitude toward safety
was present at the majority of the plants. The team approach to risk identification
Ashley employed is called
A. The Delphi technique.
B. Scenario analysis.
C. SWOT analysis.
D. HAZOP analysis
7. D. Because of Which one of the following is a major benefit that blockchain technology provides
their security, to holistic risk management?
blockchains can A. Blockchain technology allows organizations to share data through wireless
eliminate the internet and networking services.
, need to verify B. Blockchain technology can monitor driving habits by measuring acceleration,
the accuracy of speed, braking, and distance traveled.
risk management C. Blockchains can monitor things such as heat, moisture, noise, and air quality.
data. D. Because of their security, blockchains can eliminate the need to verify the
accuracy of risk management data.
8. C. Identify the The purpose of fault tree analysis is to
various ways A. Project consequences of some failure of a system component.
of interrupting B. Quantify the probability of each possibility identified in the analysis.
the sequence of C. Identify the various ways of interrupting the sequence of events leading to
events leading to system failure so that the failure itself can be prevented.
system failure so D. Provide an opportunity to discover and correct any defects in a product or
that the failure it- process while it is still in its early engineering phases.
self can be pre-
vented.
9. D. Closeness Tom, the regional manager at Westfork Mutual, has planned a community service
day for all employees. He has asked his two assistant managers, Julian and Leah,
to spread the word to other employees and encourage them to attend. Based on
centrality measures of the company's email traflc, Tom is confident that Julian will
spread the word to more employees more quickly through email than will Leah.
Tom's confidence is based on Julian's high score in which one of the following
centrality measures?
A. Degree
B. Betweenness
C. Association
D. Closeness
10. B. Hazard and op- Home Appliance Company has decided to change its production method. Previ-
erability (HAZOP) ously, small teams of workers assembled washers, dryers, and dishwashers. Under
study. the new production method, an assembly-line will be used, with some functions
performed by robotics. Before making the change, Home Appliance Company
Answers
1. B. Indenture lev- Air-Freight Company wants to use failure mode and effects analysis (FMEA) to
els analyze its systems, subsystems, components, sub-assemblies, and parts. Level 1
is the overall system for shipping freight. Level 2 is the system segments, with the
prime items (air freight hubs, schedulers, and logistics) designated as Level 3.
Level 4 is the subsystems (local freight handlers, package sorters, etc.). Level 5 is
the hardware and parts (forklifts, conveyor belts, planes, and delivery vans, etc.).
In FMEA, these various systems and subsystems are called
A. Critical levels.
B. Indenture levels.
C. Complexity levels.
D. Risk priority levels.
2. A. One way of Which one of the following statements is correct with respect to continuous prob-
presenting a con- ability distributions?
tinuous probabil- A. One way of presenting a continuous probability distribution is to divide the
ity distribution is distribution into a countable number of bins.
to divide the dis- B. There are a finite number of possible outcomes in a continuous probability
tribution into a distribution.
countable num- C. They are typically used for loss frequency analysis rather than severity analysis.
ber of bins. D. They are most effectively illustrated using tables and pie charts.
3. B. To perpetu- Which one of the following is a major responsibility of corporate directors?
ate a competent A. To manage investments and disbursements of the corporation's assets
board through B. To perpetuate a competent board through regular elections
regular elections C. To establish the procedures and operational goals for each department
D. To create the proper annual and interim reports for shareholders
4. D. The risk treat- The risk management department at Computer Hardware Company uses risk maps
ment opportuni- to graph and analyze the risks faced by the company. One area of special concern
ty to further re- to the risk management team is the difference between residual risk and optimum
duce risk. risk. This difference represents
A. The risk that cannot be altered and is retained by the firm.
, B. The potential risk that the organization does not currently face, but could face if
conditions change
C. The risk that is handled, by default, through avoidance.
D. The risk treatment opportunity to further reduce risk.
5. A. Purpose. Decision tree analysis and event tree analysis are similar in a number of ways, but
differ in their
A. Purpose.
B. Process.
C. Appearance.
D. Approach.
6. A. The Delphi After a month in which three employees were seriously injured at company paper
technique. mills, Ashley, the risk manager of Bright White Paper Company, wanted some
answers about the causes of employee injuries. Ashley independently contacted
the plant manager and foreman at each of the company's plants. She asked each
person to complete a confidential questionnaire regarding safety procedures. After
receiving the responses to the questionnaire, Ashley summarized the results and
asked the same questions again instructing each person to consider revising their
responses based on the initial questionnaire results. The analysis revealed that
new workers were not being properly trained and that a lax attitude toward safety
was present at the majority of the plants. The team approach to risk identification
Ashley employed is called
A. The Delphi technique.
B. Scenario analysis.
C. SWOT analysis.
D. HAZOP analysis
7. D. Because of Which one of the following is a major benefit that blockchain technology provides
their security, to holistic risk management?
blockchains can A. Blockchain technology allows organizations to share data through wireless
eliminate the internet and networking services.
, need to verify B. Blockchain technology can monitor driving habits by measuring acceleration,
the accuracy of speed, braking, and distance traveled.
risk management C. Blockchains can monitor things such as heat, moisture, noise, and air quality.
data. D. Because of their security, blockchains can eliminate the need to verify the
accuracy of risk management data.
8. C. Identify the The purpose of fault tree analysis is to
various ways A. Project consequences of some failure of a system component.
of interrupting B. Quantify the probability of each possibility identified in the analysis.
the sequence of C. Identify the various ways of interrupting the sequence of events leading to
events leading to system failure so that the failure itself can be prevented.
system failure so D. Provide an opportunity to discover and correct any defects in a product or
that the failure it- process while it is still in its early engineering phases.
self can be pre-
vented.
9. D. Closeness Tom, the regional manager at Westfork Mutual, has planned a community service
day for all employees. He has asked his two assistant managers, Julian and Leah,
to spread the word to other employees and encourage them to attend. Based on
centrality measures of the company's email traflc, Tom is confident that Julian will
spread the word to more employees more quickly through email than will Leah.
Tom's confidence is based on Julian's high score in which one of the following
centrality measures?
A. Degree
B. Betweenness
C. Association
D. Closeness
10. B. Hazard and op- Home Appliance Company has decided to change its production method. Previ-
erability (HAZOP) ously, small teams of workers assembled washers, dryers, and dishwashers. Under
study. the new production method, an assembly-line will be used, with some functions
performed by robotics. Before making the change, Home Appliance Company
