ARM 401 Practice Exams With Solutions
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The risk management department at Computer Hardware Company uses risk maps to graph and
analyze the risks faced by the company. One area of special concern to the risk management
team is the difference between residual risk and optimum risk. This difference represents
A) The potential risk that the organization does not currently face, but could face if conditions
change
B) The risk treatment opportunity to further reduce risk
C) The risk that is handled, by default, through avoidance
D) The risk that cannot be altered and is retained by the firm B) The risk treatment
opportunity to further reduce risk
Shelton Manufacturing executives are growing increasingly concerned about wildfires and the
potential effects on supply chain management. As the risk professional, Carla has been asked to
meet with experts on the subject and report back to the executive team. Which one of the
following should Carla do before meeting with external wildfire experts?
A) Carla should try to learn as much as possible about wildfires so she can impress the wildfire
experts
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B) Carla should research the field and get a working understanding of wildfires
C) Carla should solicit questions from internal experts and submit them to the external wildfire
experts
D) Carla should speak with internal subject-matter experts in hopes that she can avoid needing
the external wildfire experts B) Carla should research the field and get a working
understanding of wildfires
Cotton Products Company manufactures cotton clothing, towels, sheets, and other cotton
products. All production takes place at one large multi-acre production facility. The risk manager
of Cotton Products Company called a meeting attended by her staff, the plant foreman, the plant
safety engineer, and the head of operations. She told the group that she wanted to analyze one
problem-the top event-a catastrophic fire at the production facility. The group discussed all the
causes of failure and factors that could contribute to the top event. The causes of the -top event-
were listed, and methods of reducing the likelihood and consequences of the event were
examined. The technique the risk manager employed is called
A) Fault tree analysis
B) SWOT analysis
C) Failure mode and effects analysis
D) Scenario analysis A) Fault tree analysis
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Northeast Urban Properties owns and operates office buildings in New York, Boston, and
Philadelphia. The risk manager decided to examine the impact of potential terrorist attacks on
each building. For example, for the Philadelphia building, the risk manager examined attacks at
three levels: scare (e.g. suspicious package), minor explosion or gas attack, and large-scale
attack. For each level, the risk manager listed the risk owners, the risk quadrants impacted, the
likelihood of attack, the consequence, the risk level, and the risk control measures that needed to
be implemented. This information was summarized in a one-page chart. The chart the risk
manager prepared is a
A) Risk report with warning color code
B) Risk matrix with value at risk
C) Risk register with scenario model
D) Risk map with simulation Risk register with scenario model
William is a project manager for Parker International. He has been assigned a key project with a
short deadline. William realizes that this project is going to require revising the job duties of
some individuals and a collaborative effort from of all team members. When revising job duties,
William should do which one of the following?
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A) Try to enrich individuals' work rather than merely expand it
B) Rely on the most senior individuals to take on additional duties
C) Overload some individuals with more work than others
D) Focus on the individuals' personalities rather than results A) Try to enrich individuals'
work rather than merely expand it
Blithe Manufacturing has experienced a drop in market share. The marketing department has
come up with a way to differentiate their product in order to regain market share. Blithe has
assembled a team of individuals representing different organizational functions to analyze both
internal and external factors of the new product and decide whether or not it is feasible. Which
one of the following team approaches to risk identification is Blithe using?
A) Delphi technique
B) SWOT analysis
C) Scenario analysis
D) HAZOP workshop B) SWOT analysis
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The risk management department at Computer Hardware Company uses risk maps to graph and
analyze the risks faced by the company. One area of special concern to the risk management
team is the difference between residual risk and optimum risk. This difference represents
A) The potential risk that the organization does not currently face, but could face if conditions
change
B) The risk treatment opportunity to further reduce risk
C) The risk that is handled, by default, through avoidance
D) The risk that cannot be altered and is retained by the firm B) The risk treatment
opportunity to further reduce risk
Shelton Manufacturing executives are growing increasingly concerned about wildfires and the
potential effects on supply chain management. As the risk professional, Carla has been asked to
meet with experts on the subject and report back to the executive team. Which one of the
following should Carla do before meeting with external wildfire experts?
A) Carla should try to learn as much as possible about wildfires so she can impress the wildfire
experts
, ARM 401 Practice Exams With Solutions
Verified By Experts
B) Carla should research the field and get a working understanding of wildfires
C) Carla should solicit questions from internal experts and submit them to the external wildfire
experts
D) Carla should speak with internal subject-matter experts in hopes that she can avoid needing
the external wildfire experts B) Carla should research the field and get a working
understanding of wildfires
Cotton Products Company manufactures cotton clothing, towels, sheets, and other cotton
products. All production takes place at one large multi-acre production facility. The risk manager
of Cotton Products Company called a meeting attended by her staff, the plant foreman, the plant
safety engineer, and the head of operations. She told the group that she wanted to analyze one
problem-the top event-a catastrophic fire at the production facility. The group discussed all the
causes of failure and factors that could contribute to the top event. The causes of the -top event-
were listed, and methods of reducing the likelihood and consequences of the event were
examined. The technique the risk manager employed is called
A) Fault tree analysis
B) SWOT analysis
C) Failure mode and effects analysis
D) Scenario analysis A) Fault tree analysis
, ARM 401 Practice Exams With Solutions
Verified By Experts
Northeast Urban Properties owns and operates office buildings in New York, Boston, and
Philadelphia. The risk manager decided to examine the impact of potential terrorist attacks on
each building. For example, for the Philadelphia building, the risk manager examined attacks at
three levels: scare (e.g. suspicious package), minor explosion or gas attack, and large-scale
attack. For each level, the risk manager listed the risk owners, the risk quadrants impacted, the
likelihood of attack, the consequence, the risk level, and the risk control measures that needed to
be implemented. This information was summarized in a one-page chart. The chart the risk
manager prepared is a
A) Risk report with warning color code
B) Risk matrix with value at risk
C) Risk register with scenario model
D) Risk map with simulation Risk register with scenario model
William is a project manager for Parker International. He has been assigned a key project with a
short deadline. William realizes that this project is going to require revising the job duties of
some individuals and a collaborative effort from of all team members. When revising job duties,
William should do which one of the following?
, ARM 401 Practice Exams With Solutions
Verified By Experts
A) Try to enrich individuals' work rather than merely expand it
B) Rely on the most senior individuals to take on additional duties
C) Overload some individuals with more work than others
D) Focus on the individuals' personalities rather than results A) Try to enrich individuals'
work rather than merely expand it
Blithe Manufacturing has experienced a drop in market share. The marketing department has
come up with a way to differentiate their product in order to regain market share. Blithe has
assembled a team of individuals representing different organizational functions to analyze both
internal and external factors of the new product and decide whether or not it is feasible. Which
one of the following team approaches to risk identification is Blithe using?
A) Delphi technique
B) SWOT analysis
C) Scenario analysis
D) HAZOP workshop B) SWOT analysis
