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ARM 400 EXAM 2026 100% PASS ASSURED
EXAMINATION SOLUTIONS
When communicating a decision up the
organization's chain of command, consulting
with outside experts can help a risk
management professional do which one of the
following?
A. Seek feedback from stakeholders
B. Stay focused on the organization's
objectives
C. Define the organization's risk appetite
D. Enhance stakeholders' confidence in the
process - correct answer- D
Which of the following risk management program
goals is an essential goal for all public
entities?
A. Earning stability
B. Continuity of operations
C. Growth
D. Survival - correct answer- B
The traditional definition of risk management
reflects the traditional concept of risk as
A. Both positive and negative.
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B. Negative.
C. Uncontrollable.
D. Strategic. - correct answer- B
During the past year, International Toys has
undertaken four capital projects. The company
has renovated and refurbished one of its aging
warehouse buildings. It has purchased the most
recent version of its current order processing
computer software. It has added two trucks to
its fleet of delivery vehicles. Lastly, it has
purchased a new production machine that will
allow it to launch a new product line. Which
one of the following company projects is the
most speculative risk?
A. The two new trucks
B. The warehouse refurbishment
C. The software upgrade
D. The new production machine - correct
answer- D
Which one of the following statements is true
regarding the basic measures that apply to
risk management?
A. Consequences measure the degree to which an
occurrence could positively or negatively
affect an organization.
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B. Hedging is a risk management strategy that
can reduce the risk of correlation.
C. Risk increases as volatility decreases.
D. Longer time horizons are generally less
risky that shorter ones. - correct answer- A
Which one of the following provides a measure
of the maximum potential damage associated
with an occurrence?
A. Exposure
B. Duration
C. Underwriting risk
D. Maximum probable loss - correct answer- A
Samuel was recently hired as a risk management
professional for Parker Property Management.
He has been asked by senior management to
review the organization's current insurance
policies to make sure that the organization is
adequately protected, and also see if there
are any opportunities to save on the premiums.
Samuel must do which one of the following
through internal communication before he will
be able to complete this task?
A. Determine the organization's risk appetite
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B. Identify all of the risks that the
organization faces
C. Earn the confidence of the organization's
board of directors
D. Become familiar with industry regulations -
correct answer- A
Catastrophes such as recent earthquakes and
the 2011 tsunami in Japan pointed out a need
for many organizations to evaluate and manage
their
A. Supply-chain risk.
B. Derivative risk.
C. Compliance risk.
D. Political risk. - correct answer- A
Risk management professionals must collaborate
with data analysts during which two steps of
the risk management process?
A. Treat risks and monitor risk treatments
B. Scan the environment and analyze risks
C. Analyze risks and monitor risk treatments
D. Identify risks and treat risks - correct
answer- C
ARM 400 EXAM 2026 100% PASS ASSURED
EXAMINATION SOLUTIONS
When communicating a decision up the
organization's chain of command, consulting
with outside experts can help a risk
management professional do which one of the
following?
A. Seek feedback from stakeholders
B. Stay focused on the organization's
objectives
C. Define the organization's risk appetite
D. Enhance stakeholders' confidence in the
process - correct answer- D
Which of the following risk management program
goals is an essential goal for all public
entities?
A. Earning stability
B. Continuity of operations
C. Growth
D. Survival - correct answer- B
The traditional definition of risk management
reflects the traditional concept of risk as
A. Both positive and negative.
,2 | Page
B. Negative.
C. Uncontrollable.
D. Strategic. - correct answer- B
During the past year, International Toys has
undertaken four capital projects. The company
has renovated and refurbished one of its aging
warehouse buildings. It has purchased the most
recent version of its current order processing
computer software. It has added two trucks to
its fleet of delivery vehicles. Lastly, it has
purchased a new production machine that will
allow it to launch a new product line. Which
one of the following company projects is the
most speculative risk?
A. The two new trucks
B. The warehouse refurbishment
C. The software upgrade
D. The new production machine - correct
answer- D
Which one of the following statements is true
regarding the basic measures that apply to
risk management?
A. Consequences measure the degree to which an
occurrence could positively or negatively
affect an organization.
,3 | Page
B. Hedging is a risk management strategy that
can reduce the risk of correlation.
C. Risk increases as volatility decreases.
D. Longer time horizons are generally less
risky that shorter ones. - correct answer- A
Which one of the following provides a measure
of the maximum potential damage associated
with an occurrence?
A. Exposure
B. Duration
C. Underwriting risk
D. Maximum probable loss - correct answer- A
Samuel was recently hired as a risk management
professional for Parker Property Management.
He has been asked by senior management to
review the organization's current insurance
policies to make sure that the organization is
adequately protected, and also see if there
are any opportunities to save on the premiums.
Samuel must do which one of the following
through internal communication before he will
be able to complete this task?
A. Determine the organization's risk appetite
, 4 | Page
B. Identify all of the risks that the
organization faces
C. Earn the confidence of the organization's
board of directors
D. Become familiar with industry regulations -
correct answer- A
Catastrophes such as recent earthquakes and
the 2011 tsunami in Japan pointed out a need
for many organizations to evaluate and manage
their
A. Supply-chain risk.
B. Derivative risk.
C. Compliance risk.
D. Political risk. - correct answer- A
Risk management professionals must collaborate
with data analysts during which two steps of
the risk management process?
A. Treat risks and monitor risk treatments
B. Scan the environment and analyze risks
C. Analyze risks and monitor risk treatments
D. Identify risks and treat risks - correct
answer- C
