ARM 400 EVALUATION PRACTICE EXAM QUESTIONS AND
ANSWERS MARKED A+
✔✔financial risk - ✔✔arises from the effect of market forces on financial assets or
liabilities
✔✔Strategic Risk - ✔✔Arises from trends in the economy and society. Economic
Environment. Political Environment. Demographics Competition.
✔✔risk management framework - ✔✔A foundation for applying the risk management
process throughout the organization.
✔✔Process for managing risk - ✔✔-scan environment
-identify risks
-analyze risks
-treat risks
-monitor and review
✔✔Risk Criteria - ✔✔Information used as a basis for measuring the significance of a
risk.
✔✔Internal Control - ✔✔A system or process that an organization uses to achieve its
operational goals, internal and external financial reporting goals, or legal and regulatory
compliance goals.
✔✔Stakeholders - ✔✔any individuals or groups that are affected by the firm's actions,
such as owners, customers, suppliers, employees, creditors, government, and the
public
✔✔External Environment - ✔✔opportunities/threats outside of organization
✔✔internal environment - ✔✔the events and trends inside an organization that affects
management, employees, and organizational culture. Like Strengths and weaknesses.
✔✔internal stockholders - ✔✔Employees, owners, and the board of directors, if any
✔✔external stockholders - ✔✔people or groups in the organization's external
environment that are affected by it. Like Customers, suppliers, unions, wholesalers,
trade associations, etc.
✔✔Internal Control - ✔✔a process designed to provide reasonable assurance regarding
the achievement of company objectives related to operations, reporting, and compliance
, ✔✔text mining - ✔✔Used by Fraud investigators to compare documents and notes
through language recognition.
✔✔Insurtech - ✔✔The use of emerging technologies in the insurance industry.
✔✔Sensors - ✔✔Input devices used to measure physical traits, such as sound, heat, or
light.
✔✔Preventive analytics - ✔✔Statistical and analytical techniques used to influence or
prevent future events or behaviors.
✔✔physical domain - ✔✔Sensors, wearables, drones, robots, and autonomous
vehicles.
✔✔virtual domain - ✔✔A.I., augmented reality, computer vision, and telematics
✔✔connected ecosystems - ✔✔smart products connect physical and virtual domains.
Examples include: Property, supply chain, transportation, catastrophe, and workplace
✔✔Transducer - ✔✔A device that converts energy from one form to another
✔✔Actuator - ✔✔A device to produce physical movement based on output from a
computer system.
✔✔Accelerometers - ✔✔sensors in a vehicle that can measure a change in total
velocity, forces applied to the vehicle, direction forces were applied, whether the vehicle
rolled over, whether air bags were deployed, and the vehicle's final resting position.
✔✔Mechanical sensors - ✔✔pressure sensors, flow sensors, and motion detectors
✔✔Biochemical sensors - ✔✔Home diagnostic tests, wearable fitness monitors,
diabetes test strips/meters/patches, explosive trace fumes
✔✔Thermal sensors - ✔✔smoke detectors, heat sensors, computer hardware sensors
✔✔Radiant Sensors - ✔✔optical sensors, radar, radio frequency identification (RFID)
tags
✔✔digital twin - ✔✔dynamic software model of a machine that uses data from different
sensors to do autonomous actions
✔✔Ergonomics - ✔✔The study of workplace equipment design or how to arrange and
design devices, machines, or workspace so that people and things interact safely and
most efficiently.
ANSWERS MARKED A+
✔✔financial risk - ✔✔arises from the effect of market forces on financial assets or
liabilities
✔✔Strategic Risk - ✔✔Arises from trends in the economy and society. Economic
Environment. Political Environment. Demographics Competition.
✔✔risk management framework - ✔✔A foundation for applying the risk management
process throughout the organization.
✔✔Process for managing risk - ✔✔-scan environment
-identify risks
-analyze risks
-treat risks
-monitor and review
✔✔Risk Criteria - ✔✔Information used as a basis for measuring the significance of a
risk.
✔✔Internal Control - ✔✔A system or process that an organization uses to achieve its
operational goals, internal and external financial reporting goals, or legal and regulatory
compliance goals.
✔✔Stakeholders - ✔✔any individuals or groups that are affected by the firm's actions,
such as owners, customers, suppliers, employees, creditors, government, and the
public
✔✔External Environment - ✔✔opportunities/threats outside of organization
✔✔internal environment - ✔✔the events and trends inside an organization that affects
management, employees, and organizational culture. Like Strengths and weaknesses.
✔✔internal stockholders - ✔✔Employees, owners, and the board of directors, if any
✔✔external stockholders - ✔✔people or groups in the organization's external
environment that are affected by it. Like Customers, suppliers, unions, wholesalers,
trade associations, etc.
✔✔Internal Control - ✔✔a process designed to provide reasonable assurance regarding
the achievement of company objectives related to operations, reporting, and compliance
, ✔✔text mining - ✔✔Used by Fraud investigators to compare documents and notes
through language recognition.
✔✔Insurtech - ✔✔The use of emerging technologies in the insurance industry.
✔✔Sensors - ✔✔Input devices used to measure physical traits, such as sound, heat, or
light.
✔✔Preventive analytics - ✔✔Statistical and analytical techniques used to influence or
prevent future events or behaviors.
✔✔physical domain - ✔✔Sensors, wearables, drones, robots, and autonomous
vehicles.
✔✔virtual domain - ✔✔A.I., augmented reality, computer vision, and telematics
✔✔connected ecosystems - ✔✔smart products connect physical and virtual domains.
Examples include: Property, supply chain, transportation, catastrophe, and workplace
✔✔Transducer - ✔✔A device that converts energy from one form to another
✔✔Actuator - ✔✔A device to produce physical movement based on output from a
computer system.
✔✔Accelerometers - ✔✔sensors in a vehicle that can measure a change in total
velocity, forces applied to the vehicle, direction forces were applied, whether the vehicle
rolled over, whether air bags were deployed, and the vehicle's final resting position.
✔✔Mechanical sensors - ✔✔pressure sensors, flow sensors, and motion detectors
✔✔Biochemical sensors - ✔✔Home diagnostic tests, wearable fitness monitors,
diabetes test strips/meters/patches, explosive trace fumes
✔✔Thermal sensors - ✔✔smoke detectors, heat sensors, computer hardware sensors
✔✔Radiant Sensors - ✔✔optical sensors, radar, radio frequency identification (RFID)
tags
✔✔digital twin - ✔✔dynamic software model of a machine that uses data from different
sensors to do autonomous actions
✔✔Ergonomics - ✔✔The study of workplace equipment design or how to arrange and
design devices, machines, or workspace so that people and things interact safely and
most efficiently.
