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ARM 402 EXAM PRACTICE 2026 100% PASS
ASSURED EXAMINATION SOLUTIONS.
Telematics devices allow organizations to
accurately identify patterns of risk and
predict risk for which one of the following
types of loss exposures?
A. Automobile
B. Property
C. Workers compensation
D. Business income - correct answer- A
Which one of the following is a major benefit
that smart insurance contracts can provide to
insurance customers?
A. Smart contracts can render a risk
completely preventable.
B. Smart contracts can provide broader
coverage at a lower cost.
C. Smart contracts can dramatically increase
the speed of loss payments.
D. Smart contracts can significantly increase
the speed of premium payments. - correct
answer- C
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Maxwell Company has just invested a large sum
in new, highly-sophisticated computer
equipment and building renovations. Maxwell
arranged to lease identical equipment at
another location so that it could use the
equipment in the event of a disaster at its
location. Maxwell's lease of identical
equipment at another location is an example of
A. Duplication.
B. Separation.
C. Loss reduction.
D. Diversification. - correct answer- A
Olivia is planning a meeting to explain a new
cyber security procedure. She expects that the
meeting will be impeded by hidden agendas.
Which one of the following is the best way for
Olivia to deal with potential hidden agendas?
A. Olivia should refuse to take questions
during her meeting, and request that any
questions be forwarded to her in writing after
the meeting.
B. Olivia should start the meeting by stating
that she does not expect everyone like the new
procedure, but they must accept it.
C. Olivia should start the meeting by asking
participants to state their concerns or
feeling about the procedure.
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D. Olivia should hold a separate meeting for
those individuals who she suspects have a
hidden agenda. - correct answer- C
Which one of the following is a common problem
with meetings that leaders should try to
avoid?
A. Trying to stick to an agenda and avoid
interruptions
B. Committing to an end time, as well as a
start time
C. Having the wrong people attend
D. Stating the objective in writing before the
meeting - correct answer- C
Which one of the following statements about
correlation and covariance is true?
A. Covariance is a scaled version of
correlation and ranges from -1 to +1.
B. The correlation between variables ranges
from 0 to +1.
C. Covariance measures the extent to which
variables move together or independently.
D. Correlation measures causality. - correct
answer- C
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Once a holistic risk management program is
created and put into effect, which one of the
following methods can be used to allow
constant and consistent monitoring of the
process?
A. Bow-tie diagram
B. Feedback loop
C. Dashboard reporting
D. SWOT analysis - correct answer- B
A risk control technique that reduces the
frequency of a particular loss is
A. Loss prevention.
B. Loss reduction.
C. Diversification.
D. Duplication. - correct answer- A
Ivanhoe Corporation purchases stock in a bank
and in a pharmaceutical manufacturer. Because
these are unrelated industries, Ivanhoe hope
that any losses in one stock will be more than
offset by profits in another. Ivanhoe is using
which one of the following risk management
techniques?
A. Risk transfer
ARM 402 EXAM PRACTICE 2026 100% PASS
ASSURED EXAMINATION SOLUTIONS.
Telematics devices allow organizations to
accurately identify patterns of risk and
predict risk for which one of the following
types of loss exposures?
A. Automobile
B. Property
C. Workers compensation
D. Business income - correct answer- A
Which one of the following is a major benefit
that smart insurance contracts can provide to
insurance customers?
A. Smart contracts can render a risk
completely preventable.
B. Smart contracts can provide broader
coverage at a lower cost.
C. Smart contracts can dramatically increase
the speed of loss payments.
D. Smart contracts can significantly increase
the speed of premium payments. - correct
answer- C
,2 | Page
Maxwell Company has just invested a large sum
in new, highly-sophisticated computer
equipment and building renovations. Maxwell
arranged to lease identical equipment at
another location so that it could use the
equipment in the event of a disaster at its
location. Maxwell's lease of identical
equipment at another location is an example of
A. Duplication.
B. Separation.
C. Loss reduction.
D. Diversification. - correct answer- A
Olivia is planning a meeting to explain a new
cyber security procedure. She expects that the
meeting will be impeded by hidden agendas.
Which one of the following is the best way for
Olivia to deal with potential hidden agendas?
A. Olivia should refuse to take questions
during her meeting, and request that any
questions be forwarded to her in writing after
the meeting.
B. Olivia should start the meeting by stating
that she does not expect everyone like the new
procedure, but they must accept it.
C. Olivia should start the meeting by asking
participants to state their concerns or
feeling about the procedure.
,3 | Page
D. Olivia should hold a separate meeting for
those individuals who she suspects have a
hidden agenda. - correct answer- C
Which one of the following is a common problem
with meetings that leaders should try to
avoid?
A. Trying to stick to an agenda and avoid
interruptions
B. Committing to an end time, as well as a
start time
C. Having the wrong people attend
D. Stating the objective in writing before the
meeting - correct answer- C
Which one of the following statements about
correlation and covariance is true?
A. Covariance is a scaled version of
correlation and ranges from -1 to +1.
B. The correlation between variables ranges
from 0 to +1.
C. Covariance measures the extent to which
variables move together or independently.
D. Correlation measures causality. - correct
answer- C
, 4 | Page
Once a holistic risk management program is
created and put into effect, which one of the
following methods can be used to allow
constant and consistent monitoring of the
process?
A. Bow-tie diagram
B. Feedback loop
C. Dashboard reporting
D. SWOT analysis - correct answer- B
A risk control technique that reduces the
frequency of a particular loss is
A. Loss prevention.
B. Loss reduction.
C. Diversification.
D. Duplication. - correct answer- A
Ivanhoe Corporation purchases stock in a bank
and in a pharmaceutical manufacturer. Because
these are unrelated industries, Ivanhoe hope
that any losses in one stock will be more than
offset by profits in another. Ivanhoe is using
which one of the following risk management
techniques?
A. Risk transfer
