ARM 401 Study guides, Class notes & Summaries

strategic risk - correct answer uncertainties associated with the organizations long term goals and management decisions operational risk - correct answer uncertainties associated with the organizations procedures, systems, and policies financial risk - correct answer uncertainties associated with the organizations financial activities facilitated workshops - correct answer a neutral party, who has no stake int he outcome or participation responsibilities, administers the risk w...

A risk map showing a large difference between inherent and residual risk indicates which one of the following? A. The risk is within the organization's risk appetite B. The current risk treatment is ineffective C. The current risk treatment is effective D. The risk does not need to be treated - C Lucas, a risk professional for Jones Incorporated, recently met with experts from the utility industry to discuss the potential loss of supply and risks to the infrastructure. Lucas must now d...

AZOP Process Steps - 1. Divide project/system into small components 2. Review components to identify risk 3. Identify cause and potential outcomes of risks 4. Develop solutions to risks 5. Ensure solutions work and reevaluate SWOT analysis (strengths, weaknesses, opportunities, threats) - A SWOT analysis is useful when there is a specific goal, such as determining whether engaging in a new product or project is feasible. It's less useful for analyzing current processes and procedures to ...

B. Indenture levels - Air-Freight Company wants to use failure mode and effects analysis (FMEA) to analyze its systems, subsystems, components, sub-assemblies, and parts. Level 1 is the overall system for shipping freight. Level 2 is the system segments, with the prime items (air freight hubs, schedulers, and logistics) designated as Level 3. Level 4 is the subsystems (local freight handlers, package sorters, etc.). Level 5 is the hardware and parts (forklifts, conveyor belts, planes, and de...

ARM 401 EXAM (Vocabulary) with Questions & Answers Risk threshold - The level of risk exposure above which risks are addressed and below which risks may be accepted. Sensor - A device that responds to a physical stimulus (as heat, light, sound, pressure, magnetism, or a particular motion) and transmits a resulting impulse (as for measurement or operating a control). Radio frequency identification (RFID) - uses electronic tags and labels to identify objects wirelessly over short distances

A risk map showing a large difference between inherent and residual risk indicates which one of the following? A. The risk is within the organization's risk appetite B. The current risk treatment is ineffective C. The current risk treatment is effective D. The risk does not need to be treated - C Lucas, a risk professional for Jones Incorporated, recently met with experts from the utility industry to discuss the potential loss of supply and risks to the infrastructure. Lucas must now dec...

What does the holistic approach to managing risk encompass? - Analysis and predictability of business processes and organizational decisions What is the premise of holistic risk management? - All business decisions and operations carry some risk What are the four quadrants of risk? - Hazard risk, Operational Risk, Strategic Risk, Financial Risk What is today's conception of risk? - The idea that taking risks is fundamentally necessary for growth

holistic approach to managing risk - -broader in scope, managing all areas of the business, not just hazard risks -encompasses the analysis and predictability of business processes and organizational decisions -mandates the collaboration of internal and external stakeholders to identify, assess, and treat risks -involves looking at what might be gained from decisions or actions -can uncover inconsistencies in how a company managers loss retention -can help orgs better absorb losses strate...

strategic risk - uncertainties associated with the organizations long term goals and management decisions operational risk - uncertainties associated with the organizations procedures, systems, and policies financial risk - uncertainties associated with the organizations financial activities

holistic approach to managing risk - -broader in scope, managing all areas of the business, not just hazard risks -encompasses the analysis and predictability of business processes and organizational decisions -mandates the collaboration of internal and external stakeholders to identify, assess, and treat risks -involves looking at what might be gained from decisions or actions -can uncover inconsistencies in how a company managers loss retention -can help orgs better absorb losses strate...

Brenda is the new risk manager at Telecom Company. She did a preliminary analysis to identify organizational risks. Brenda then scheduled a meeting of the organization's leaders, key employees, and other stakeholders. Brenda asked her assistant, Brian, to moderate the session since he is skilled in risk identification, and he is a skilled communicator as well. Brian encouraged brainstorming, and asked follow-up questions. After the session, Brenda and her risk management colleagues had a mu...

Brenda is the new risk manager at Telecom Company. She did a preliminary analysis to identify organizational risks. Brenda then scheduled a meeting of the organization's leaders, key employees, and other stakeholders. Brenda asked her assistant, Brian, to moderate the session since he is skilled in risk identification, and he is a skilled communicator as well. Brian encouraged brainstorming, and asked follow-up questions. After the session, Brenda and her risk management colleagues had a mu...