ARM 402 COMPREHENSIVE EXAM 2026 QUESTIONS AND
SOLUTIONS RATED A+
✔✔Which one of the following statements is correct regarding formulating an
organization's long-term strategies?
A) A long-term strategy should be an aspirational description of what an organization
will accomplish in the long-term future
B) Long-term strategies to improve performance and/or create a competitive advantage,
are based on the organization's goals and analysis of internal and external
environments.
C) Formulating an organization's long-term strategy involves determining the "who",
"what", and "when" responsibilities of each department
D) All parts of an organization play a role in formulating an organization's long-term
strategies - ✔✔B
✔✔An insured has a specific excess liability policy with a $100,000 per occurrence
retention and a $1,000,000 maximum limit. The insured suffers separate losses of
$25,000, $50,000, $100,000 and $900,000 during one policy year. Under the specific
excess liability policy, the insurer will pay
A) $100,000
B) $800,000
C) $1,000,000
D) $1,075,000 - ✔✔B
** $900,000 - $100,000 = $800,000 **
✔✔Which one of the following statements is correct with respect to risk tolerance?
A) Risk tolerance is stated in both quantitative and qualitative terms
B) Risk tolerance levels can have high-end thresholds, low-end thresholds, or both
C) A zero-risk tolerance level will typically result in the best risk-based decisions
D) An organization's risk tolerance is typically unrelated to its risk appetite - ✔✔B
✔✔An advantage of a self-insurance plan when compared with another insurance plan
is that a self-insurance plan
A) Is less expensive over the long run
B) Decreases the organization's financial uncertainty
C) Is easier to implement
D) Easily satisfies contractual requirements - ✔✔A
✔✔"The contractor agrees to indemnify and hold harmless the owner against claims,
damages, bodily injury, or property damage arising out of the contractor's work and
, caused by any act of omission of the contractor, his agents, and his employees." This is
an example of which one of the following forms of a hold-harmless agreement?
A) Intermediate form
B) Broad form
C) Limited form
D) Basic form - ✔✔C
✔✔The production phase of an organization's fleet life cycle involves
A) Purchasing vehicles selected in the conceptual and engineering phases
B) Using the vehicles to transport freight or passengers
C) Determining what types of vehicles will meet an organization's needs
D) Selecting the vehicles, operators, routes, schedules, and maintenance - ✔✔A
✔✔Which one of the following is an effective safety related technology for fleet
operations to reduce roll-overs?
A) GPS capabilities
B) Engine diagnostics
C) Antilock braking system
D) Lane departure warning system - ✔✔D
✔✔Which one of the following trademark categories provides the least protection
against infringement by competitors?
A) Fanciful mark
B) Descriptive mark
C) Suggestive mark
D) Arbitrary mark - ✔✔B
✔✔If a pool has enough loss exposures to benefit from the law of large numbers, it can
help members meet which one of the following risk financing goals?
A) Manage uncertainty
B) Comply with legal and regulatory requirements
C) Maintain liquidity
D) Minimize the cost of risk - ✔✔A
✔✔Which one of the following can limit liability if they are posted so that they are
physically apparent, expressed in clear terms, in language the other party understands,
and reasonable in extent?
A) Hold-harmless agreements
B) Exculpatory agreements
SOLUTIONS RATED A+
✔✔Which one of the following statements is correct regarding formulating an
organization's long-term strategies?
A) A long-term strategy should be an aspirational description of what an organization
will accomplish in the long-term future
B) Long-term strategies to improve performance and/or create a competitive advantage,
are based on the organization's goals and analysis of internal and external
environments.
C) Formulating an organization's long-term strategy involves determining the "who",
"what", and "when" responsibilities of each department
D) All parts of an organization play a role in formulating an organization's long-term
strategies - ✔✔B
✔✔An insured has a specific excess liability policy with a $100,000 per occurrence
retention and a $1,000,000 maximum limit. The insured suffers separate losses of
$25,000, $50,000, $100,000 and $900,000 during one policy year. Under the specific
excess liability policy, the insurer will pay
A) $100,000
B) $800,000
C) $1,000,000
D) $1,075,000 - ✔✔B
** $900,000 - $100,000 = $800,000 **
✔✔Which one of the following statements is correct with respect to risk tolerance?
A) Risk tolerance is stated in both quantitative and qualitative terms
B) Risk tolerance levels can have high-end thresholds, low-end thresholds, or both
C) A zero-risk tolerance level will typically result in the best risk-based decisions
D) An organization's risk tolerance is typically unrelated to its risk appetite - ✔✔B
✔✔An advantage of a self-insurance plan when compared with another insurance plan
is that a self-insurance plan
A) Is less expensive over the long run
B) Decreases the organization's financial uncertainty
C) Is easier to implement
D) Easily satisfies contractual requirements - ✔✔A
✔✔"The contractor agrees to indemnify and hold harmless the owner against claims,
damages, bodily injury, or property damage arising out of the contractor's work and
, caused by any act of omission of the contractor, his agents, and his employees." This is
an example of which one of the following forms of a hold-harmless agreement?
A) Intermediate form
B) Broad form
C) Limited form
D) Basic form - ✔✔C
✔✔The production phase of an organization's fleet life cycle involves
A) Purchasing vehicles selected in the conceptual and engineering phases
B) Using the vehicles to transport freight or passengers
C) Determining what types of vehicles will meet an organization's needs
D) Selecting the vehicles, operators, routes, schedules, and maintenance - ✔✔A
✔✔Which one of the following is an effective safety related technology for fleet
operations to reduce roll-overs?
A) GPS capabilities
B) Engine diagnostics
C) Antilock braking system
D) Lane departure warning system - ✔✔D
✔✔Which one of the following trademark categories provides the least protection
against infringement by competitors?
A) Fanciful mark
B) Descriptive mark
C) Suggestive mark
D) Arbitrary mark - ✔✔B
✔✔If a pool has enough loss exposures to benefit from the law of large numbers, it can
help members meet which one of the following risk financing goals?
A) Manage uncertainty
B) Comply with legal and regulatory requirements
C) Maintain liquidity
D) Minimize the cost of risk - ✔✔A
✔✔Which one of the following can limit liability if they are posted so that they are
physically apparent, expressed in clear terms, in language the other party understands,
and reasonable in extent?
A) Hold-harmless agreements
B) Exculpatory agreements
