Click here for more: Scholars nexus
ARM 400 Questions with Detailed Verified Answers
Encouraging the expression of feelings as well as facts and following up with employees on the
problems they report are two ways that managers and supervisors can
A. Cultivate two-way communication.
B. Facilitate active listening.
C. Support diverse groups.
D. Maintain control of the conversation. Ans: ✓ ✓ ✓ A. Cultivate two-way communication.
Before speaking with a group or individual, the speaker should think about what he or she wants
the other person(s) to do as a result of the conversation. Which one of the following steps in the
communication process does the speaker complete by doing this?
A. Analyze your audience
B. Set aside judgement
C. Set a clear communication objective
© Get it right 2025 Getaway - Stuvia US All rights reserved
,Click here for more: Scholars nexus
D. Deliver a message the recipient(s) want to hear Ans: ✓ ✓ ✓ C. Set a clear communication
objective
According to the law of large numbers, as the number of exposure units insured increases,
A. The size of the average loss declines.
B. The relative accuracy of predictions about future losses increases.
C. The probability of an underwriting loss increases.
D. Fewer losses are expected to occur. Ans: ✓ ✓ ✓ B. The relative accuracy of predictions about
future losses increases.
When communicating a decision up the organization's chain of command, consulting with outside
experts can help a risk management professional do which one of the following?
A. Define the organization's risk appetite
B. Stay focused on the organization's objectives
C. Enhance stakeholders' confidence in the process
D. Seek feedback from stakeholders Ans: ✓ ✓ ✓ C. Enhance stakeholders' confidence in the
process
Company G is a manufacturer of high profile golf equipment. The risk management professional for
Company G is concerned about loss of business related to product design. Failing to respond to
changing customer demand and preferences in the design of golf clubs could cost Company G
© Get it right 2025 Getaway - Stuvia US All rights reserved
,Click here for more: Scholars nexus
significant market share. Categorized according to the quadrants of risk, this exposure to loss is
classified as
A. An operational risk.
B. A strategic risk.
C. A financial risk.
D. A hazard risk. Ans: ✓ ✓ ✓ B. A strategic risk.
Which one of the following risk management objectives is critical for a manufacturer seeking new
capital from investors, stockholders, and creditors?
A. Social responsibility
B. Anticipate and recognize emerging risks
C. Eliminate downside risk
D. Reduce the deterrent effects of hazard risks Ans: ✓ ✓ ✓ D. Reduce the deterrent effects of
hazard risks
In addition to metal detectors, many airports have installed a second type of scanning technology
for checked baggage and cargo. The checked bags and cargo pass through a portal with scanners
programmed to detect and test for explosive trace fumes. These scanners, which detect explosives
based on air samples, are an example of what type of sensor used for risk assessment and control?
A. Radiant sensors.
© Get it right 2025 Getaway - Stuvia US All rights reserved
, Click here for more: Scholars nexus
B. Mechanical sensors.
C. Biochemical sensors.
D. Thermal sensors. Ans: ✓ ✓ ✓ C. Biochemical sensors.
AMRM Insurance Company sells insurance in Virginia, North Carolina, South Carolina, and Georgia.
The company has compiled a policyowner data base that can be used to send text messages when
hurricanes approach. The company provides early warnings, storm updates from the National
Weather Service, and hurricane safety measures. The company credits the system with reduced
hurricane claims. The use of the texting system is an example of
A. Artificial intelligence.
B. Preventive analytics.
C. Experience rating.
D. Sensor networks. Ans: ✓ ✓ ✓ B. Preventive analytics.
Mutual Fund Company (MFC) offers a wide array of mutual fund options to investors. Each mutual
fund has a different fund objective and set of investment guidelines that apply to the fund. While
MFC gives considerable freedom to its fund portfolio managers, they are required to abide by the
fund's investment guidelines. To monitor compliance, MFC developed a computer algorithm. The
computer algorithm continuously monitors each fund's compliance with investment guidelines. If a
fund manager violates the investment guidelines, the computer immediately notifies MFC's internal
control director, and corrective action is taken. MFC's use of the computer algorithm to monitor
investment compliance and to provide notification when corrective action is necessary illustrates
use of
A. Computer vision.
© Get it right 2025 Getaway - Stuvia US All rights reserved
ARM 400 Questions with Detailed Verified Answers
Encouraging the expression of feelings as well as facts and following up with employees on the
problems they report are two ways that managers and supervisors can
A. Cultivate two-way communication.
B. Facilitate active listening.
C. Support diverse groups.
D. Maintain control of the conversation. Ans: ✓ ✓ ✓ A. Cultivate two-way communication.
Before speaking with a group or individual, the speaker should think about what he or she wants
the other person(s) to do as a result of the conversation. Which one of the following steps in the
communication process does the speaker complete by doing this?
A. Analyze your audience
B. Set aside judgement
C. Set a clear communication objective
© Get it right 2025 Getaway - Stuvia US All rights reserved
,Click here for more: Scholars nexus
D. Deliver a message the recipient(s) want to hear Ans: ✓ ✓ ✓ C. Set a clear communication
objective
According to the law of large numbers, as the number of exposure units insured increases,
A. The size of the average loss declines.
B. The relative accuracy of predictions about future losses increases.
C. The probability of an underwriting loss increases.
D. Fewer losses are expected to occur. Ans: ✓ ✓ ✓ B. The relative accuracy of predictions about
future losses increases.
When communicating a decision up the organization's chain of command, consulting with outside
experts can help a risk management professional do which one of the following?
A. Define the organization's risk appetite
B. Stay focused on the organization's objectives
C. Enhance stakeholders' confidence in the process
D. Seek feedback from stakeholders Ans: ✓ ✓ ✓ C. Enhance stakeholders' confidence in the
process
Company G is a manufacturer of high profile golf equipment. The risk management professional for
Company G is concerned about loss of business related to product design. Failing to respond to
changing customer demand and preferences in the design of golf clubs could cost Company G
© Get it right 2025 Getaway - Stuvia US All rights reserved
,Click here for more: Scholars nexus
significant market share. Categorized according to the quadrants of risk, this exposure to loss is
classified as
A. An operational risk.
B. A strategic risk.
C. A financial risk.
D. A hazard risk. Ans: ✓ ✓ ✓ B. A strategic risk.
Which one of the following risk management objectives is critical for a manufacturer seeking new
capital from investors, stockholders, and creditors?
A. Social responsibility
B. Anticipate and recognize emerging risks
C. Eliminate downside risk
D. Reduce the deterrent effects of hazard risks Ans: ✓ ✓ ✓ D. Reduce the deterrent effects of
hazard risks
In addition to metal detectors, many airports have installed a second type of scanning technology
for checked baggage and cargo. The checked bags and cargo pass through a portal with scanners
programmed to detect and test for explosive trace fumes. These scanners, which detect explosives
based on air samples, are an example of what type of sensor used for risk assessment and control?
A. Radiant sensors.
© Get it right 2025 Getaway - Stuvia US All rights reserved
, Click here for more: Scholars nexus
B. Mechanical sensors.
C. Biochemical sensors.
D. Thermal sensors. Ans: ✓ ✓ ✓ C. Biochemical sensors.
AMRM Insurance Company sells insurance in Virginia, North Carolina, South Carolina, and Georgia.
The company has compiled a policyowner data base that can be used to send text messages when
hurricanes approach. The company provides early warnings, storm updates from the National
Weather Service, and hurricane safety measures. The company credits the system with reduced
hurricane claims. The use of the texting system is an example of
A. Artificial intelligence.
B. Preventive analytics.
C. Experience rating.
D. Sensor networks. Ans: ✓ ✓ ✓ B. Preventive analytics.
Mutual Fund Company (MFC) offers a wide array of mutual fund options to investors. Each mutual
fund has a different fund objective and set of investment guidelines that apply to the fund. While
MFC gives considerable freedom to its fund portfolio managers, they are required to abide by the
fund's investment guidelines. To monitor compliance, MFC developed a computer algorithm. The
computer algorithm continuously monitors each fund's compliance with investment guidelines. If a
fund manager violates the investment guidelines, the computer immediately notifies MFC's internal
control director, and corrective action is taken. MFC's use of the computer algorithm to monitor
investment compliance and to provide notification when corrective action is necessary illustrates
use of
A. Computer vision.
© Get it right 2025 Getaway - Stuvia US All rights reserved
