ARM Practice Exam Questions
General Liability Insurance - correct answer ✔Covers the insured's legal
defense costs when defending against a claim of liability.
Commercial package policies typically include these kind of coverages -
correct answer ✔business property, liability, and business income
Morale Hazard - correct answer ✔an insured person's attitude about his
belongings.
Product Liability - correct answer ✔Most general liability insurance policies
include coverage for this
Property Losses - correct answer ✔In the insurance industry the term "net
income losses" is usually associated with
Avoidance can be called abandonment when the organization - correct
answer ✔A cause of loss
Avoidance can be called abandonment when the organization - correct
answer ✔Decides to eliminate an existing loss exposure
Which risk control technique is being used by a manufacturer that installs a
wet-pipe sprinkler system in its warehouse - correct answer ✔Reduction
The purpose of all workers compensation laws is to provide this - correct
answer ✔Medical and wage replacement benefits to injured employees.
,Integration of the management principles governing the organization with the
risk management process is - correct answer ✔Risk governance
Based on the ISO 31000 definition of risk assessment, what step includes
determining the level of risk and its potential effects on the organization? -
correct answer ✔Risk Analysis
What is true regarding the International Organization for Standardization's ISO
31000 standard? - correct answer ✔ISO 31000 applies regardless of
whether the risk has positive and/or negative consequences.
Solvency II includes standards for what that was not addressed in Solvency I?
- correct answer ✔Risk Management
Which one of the following statements regarding the scope of ISO 31000 is
true? - correct answer ✔ISO 31000 may be applied to risks that can have
positive consequences.
Based on Basel III principles, what group should take the lead in establishing
a strong risk management culture? - correct answer ✔Board of directors
What is true about risk management, Solvency II, and Basel II and III
standards? - correct answer ✔C. Many risk management standards, such as
ISO 31000, are voluntary.
What is a key feature of the COSO standard but not other risk management
standards? - correct answer ✔Control Activites
, The requirements of the Sarbanes-Oxley Act are a major reason for the
development of which one of the following? - correct answer ✔COSO
Enterprise Risk Management—Integrated Framework
Solvency II is a new regulatory standard in the European Union (EU) to
establish principles for risk management and consistency in regulation for
what industry? - correct answer ✔Insurance
In 1999, the Basel Committee issued a proposal for a revised Capital
Adequacy Framework which consisted of three pillars. One pillar is a review of
an institution's internal assessment process and capital adequacy. This pillar
is... - correct answer ✔Supervisory
MVS = - correct answer ✔Fair Value of Assets - Fair Value of Liabilities
Risk managers can have a hard time valuing this kind of property due to the
unique features of each tract - correct answer ✔Unimproved Land
The measure employed that compares the amount the insurer has paid in
losses to the premiums it has earned - correct answer ✔Loss Ratio
What kind of organization would most likely be affected by commodity price
risk? - correct answer ✔A Manufacturer
What type of financial risk has only negative potential? - correct answer
✔Credit Risk
The fund's manager said that on any given day, there is a 5% probability of
losing more than 3% of the investment's worth. The statistic quoted by the
fund manager is - correct answer ✔Value At Risk (VaR)
General Liability Insurance - correct answer ✔Covers the insured's legal
defense costs when defending against a claim of liability.
Commercial package policies typically include these kind of coverages -
correct answer ✔business property, liability, and business income
Morale Hazard - correct answer ✔an insured person's attitude about his
belongings.
Product Liability - correct answer ✔Most general liability insurance policies
include coverage for this
Property Losses - correct answer ✔In the insurance industry the term "net
income losses" is usually associated with
Avoidance can be called abandonment when the organization - correct
answer ✔A cause of loss
Avoidance can be called abandonment when the organization - correct
answer ✔Decides to eliminate an existing loss exposure
Which risk control technique is being used by a manufacturer that installs a
wet-pipe sprinkler system in its warehouse - correct answer ✔Reduction
The purpose of all workers compensation laws is to provide this - correct
answer ✔Medical and wage replacement benefits to injured employees.
,Integration of the management principles governing the organization with the
risk management process is - correct answer ✔Risk governance
Based on the ISO 31000 definition of risk assessment, what step includes
determining the level of risk and its potential effects on the organization? -
correct answer ✔Risk Analysis
What is true regarding the International Organization for Standardization's ISO
31000 standard? - correct answer ✔ISO 31000 applies regardless of
whether the risk has positive and/or negative consequences.
Solvency II includes standards for what that was not addressed in Solvency I?
- correct answer ✔Risk Management
Which one of the following statements regarding the scope of ISO 31000 is
true? - correct answer ✔ISO 31000 may be applied to risks that can have
positive consequences.
Based on Basel III principles, what group should take the lead in establishing
a strong risk management culture? - correct answer ✔Board of directors
What is true about risk management, Solvency II, and Basel II and III
standards? - correct answer ✔C. Many risk management standards, such as
ISO 31000, are voluntary.
What is a key feature of the COSO standard but not other risk management
standards? - correct answer ✔Control Activites
, The requirements of the Sarbanes-Oxley Act are a major reason for the
development of which one of the following? - correct answer ✔COSO
Enterprise Risk Management—Integrated Framework
Solvency II is a new regulatory standard in the European Union (EU) to
establish principles for risk management and consistency in regulation for
what industry? - correct answer ✔Insurance
In 1999, the Basel Committee issued a proposal for a revised Capital
Adequacy Framework which consisted of three pillars. One pillar is a review of
an institution's internal assessment process and capital adequacy. This pillar
is... - correct answer ✔Supervisory
MVS = - correct answer ✔Fair Value of Assets - Fair Value of Liabilities
Risk managers can have a hard time valuing this kind of property due to the
unique features of each tract - correct answer ✔Unimproved Land
The measure employed that compares the amount the insurer has paid in
losses to the premiums it has earned - correct answer ✔Loss Ratio
What kind of organization would most likely be affected by commodity price
risk? - correct answer ✔A Manufacturer
What type of financial risk has only negative potential? - correct answer
✔Credit Risk
The fund's manager said that on any given day, there is a 5% probability of
losing more than 3% of the investment's worth. The statistic quoted by the
fund manager is - correct answer ✔Value At Risk (VaR)
