ARM 401 Segment A Assignment 1 UPDATED ACTUAL Questions and
CORRECT Answers
1. SoCal Movie Company produces movies at a studio Scenario analysis.
in Southern California. The risk manager decided to
identify the range of potential consequences associ-
ated 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 pro-
duction, 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
2. Lucas, a risk professional for Jones Incorporated, re- The organization's risk ap-
cently met with experts from the utility industry to petite and tolerance levels.
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
3. Northern Consolidated is evaluating the financial risk A negative covariance.
associated with its investment portfolio. The risk man-
ager knows that as interest rates increase, bond values
decrease. This relationship is known as
4. A risk map showing a large difference between inher- The current risk treatment
ent and residual risk indicates which one of the follow- is effective
ing?
5. Which one of the following occurs when individuals, Collaboration
departments, or teams from different areas work to-
gether to accomplish a shared organizational goal?
, 6.
2/6
CORRECT Answers
1. SoCal Movie Company produces movies at a studio Scenario analysis.
in Southern California. The risk manager decided to
identify the range of potential consequences associ-
ated 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 pro-
duction, 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
2. Lucas, a risk professional for Jones Incorporated, re- The organization's risk ap-
cently met with experts from the utility industry to petite and tolerance levels.
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
3. Northern Consolidated is evaluating the financial risk A negative covariance.
associated with its investment portfolio. The risk man-
ager knows that as interest rates increase, bond values
decrease. This relationship is known as
4. A risk map showing a large difference between inher- The current risk treatment
ent and residual risk indicates which one of the follow- is effective
ing?
5. Which one of the following occurs when individuals, Collaboration
departments, or teams from different areas work to-
gether to accomplish a shared organizational goal?
, 6.
2/6
