Associate in Risk Management (ARM) Practice
Examination Newest 2025 – 2026 Questions From
Past Papers Actual Exams Complete 100 Questions
And Correct Detailed Answers (Verified Answers)
|Already Graded A+||Brand New!!
Content Covered (Most Tested Areas):
Risk Identification and Assessment • Risk Analysis Techniques
• Risk Control Methods • Risk Financing • Enterprise Risk
Management (ERM) • Legal Principles of Risk • Insurance
Fundamentals • Risk Treatment Strategies • Organizational
Risk Governance • Quantitative Risk Evaluation
1. A risk manager evaluating possible threats to company operations is
primarily performing which step in the risk management process?
A. Risk financing
B. Risk identification
C. Risk transfer
D. Risk control
Correct Answer: B. Risk identification
Risk identification is the stage where potential risks or hazards that could affect
the organization are recognized and documented before analysis or treatment.
2. A company decides to install fire suppression systems to reduce potential
property loss. This is an example of:
,A. Risk transfer
B. Risk avoidance
C. Risk reduction
D. Risk financing
Correct Answer: C. Risk reduction
Risk reduction involves implementing measures that decrease either the likelihood
or severity of a loss event.
3. Which technique is commonly used to identify operational risks within
complex processes?
A. Brainstorming sessions
B. Historical premium analysis
C. Dividend calculations
D. Market speculation
Correct Answer: A. Brainstorming sessions
Brainstorming encourages cross-functional teams to generate and identify
potential risks in operations and decision-making.
4. The main goal of enterprise risk management (ERM) is to:
A. Eliminate all risks
B. Integrate risk management across the organization
C. Focus only on financial risks
D. Transfer all risk to insurers
Correct Answer: B. Integrate risk management across the organization
ERM focuses on a holistic view of risk across the enterprise rather than treating
risks individually.
5. When a company chooses not to engage in an activity because it is too
risky, the strategy is called:
A. Risk avoidance
B. Risk retention
, C. Risk transfer
D. Risk financing
Correct Answer: A. Risk avoidance
Risk avoidance removes the possibility of loss by not participating in the risky
activity.
6. Which of the following is an example of risk transfer?
A. Installing alarms
B. Creating safety training programs
C. Purchasing insurance coverage
D. Avoiding hazardous work
Correct Answer: C. Purchasing insurance coverage
Insurance transfers financial consequences of a loss from the organization to the
insurer.
7. A risk manager analyzing the frequency and severity of potential losses is
performing:
A. Risk identification
B. Risk analysis
C. Risk monitoring
D. Risk avoidance
Correct Answer: B. Risk analysis
Risk analysis evaluates likelihood and impact after risks have been identified.
8. Which financial method involves setting aside funds internally to cover
potential losses?
A. Insurance pooling
B. Risk transfer
C. Risk retention
D. Risk avoidance
Examination Newest 2025 – 2026 Questions From
Past Papers Actual Exams Complete 100 Questions
And Correct Detailed Answers (Verified Answers)
|Already Graded A+||Brand New!!
Content Covered (Most Tested Areas):
Risk Identification and Assessment • Risk Analysis Techniques
• Risk Control Methods • Risk Financing • Enterprise Risk
Management (ERM) • Legal Principles of Risk • Insurance
Fundamentals • Risk Treatment Strategies • Organizational
Risk Governance • Quantitative Risk Evaluation
1. A risk manager evaluating possible threats to company operations is
primarily performing which step in the risk management process?
A. Risk financing
B. Risk identification
C. Risk transfer
D. Risk control
Correct Answer: B. Risk identification
Risk identification is the stage where potential risks or hazards that could affect
the organization are recognized and documented before analysis or treatment.
2. A company decides to install fire suppression systems to reduce potential
property loss. This is an example of:
,A. Risk transfer
B. Risk avoidance
C. Risk reduction
D. Risk financing
Correct Answer: C. Risk reduction
Risk reduction involves implementing measures that decrease either the likelihood
or severity of a loss event.
3. Which technique is commonly used to identify operational risks within
complex processes?
A. Brainstorming sessions
B. Historical premium analysis
C. Dividend calculations
D. Market speculation
Correct Answer: A. Brainstorming sessions
Brainstorming encourages cross-functional teams to generate and identify
potential risks in operations and decision-making.
4. The main goal of enterprise risk management (ERM) is to:
A. Eliminate all risks
B. Integrate risk management across the organization
C. Focus only on financial risks
D. Transfer all risk to insurers
Correct Answer: B. Integrate risk management across the organization
ERM focuses on a holistic view of risk across the enterprise rather than treating
risks individually.
5. When a company chooses not to engage in an activity because it is too
risky, the strategy is called:
A. Risk avoidance
B. Risk retention
, C. Risk transfer
D. Risk financing
Correct Answer: A. Risk avoidance
Risk avoidance removes the possibility of loss by not participating in the risky
activity.
6. Which of the following is an example of risk transfer?
A. Installing alarms
B. Creating safety training programs
C. Purchasing insurance coverage
D. Avoiding hazardous work
Correct Answer: C. Purchasing insurance coverage
Insurance transfers financial consequences of a loss from the organization to the
insurer.
7. A risk manager analyzing the frequency and severity of potential losses is
performing:
A. Risk identification
B. Risk analysis
C. Risk monitoring
D. Risk avoidance
Correct Answer: B. Risk analysis
Risk analysis evaluates likelihood and impact after risks have been identified.
8. Which financial method involves setting aside funds internally to cover
potential losses?
A. Insurance pooling
B. Risk transfer
C. Risk retention
D. Risk avoidance
