ARM 400 ACTUAL EXAM SCRIPT 2026
VERIFIED QUESTIONS AND SOLUTIONS
PREMIUM STUDY GUIDE
◉ The risk that customers or other creditors will fail to make
promised payments as they come due. Answer: credit risk
◉ The perceived amount of risk based on an individual's or
organization's opinion. Answer: subjective risk
◉ The measurable variation in uncertain outcomes based on facts
and data.. Answer: objective risk
◉ A risk that affects only some individuals, businesses, or small
groups.. Answer: diversifiable risk
◉ The potential for a major disruption in the function of an entire
market or financial system.. Answer: systemic risk
◉ Uncertainty about investments future value because of potential
changes in the market for that type of investment.. Answer: market
risk
, ◉ The risk that an asset cannot be sold on short notice without
incurring loss.. Answer: liquidity risk
◉ A foundation for applying the risk management process
throughout the organization.. Answer: risk management framework
◉ Information used as a basis for measuring the significance of a
risk.. Answer: risk criteria
◉ A system or process that an organization uses to achieve its
operational goals, internal and external financial reporting goals, or
legal and regulatory compliance goals.. Answer: internal control
◉ The use of emerging technologies in the insurance industry.
Answer: insurtech
◉ An innovative item that uses sensors; wireless sensor networks;
and data collection, transmission, and analysis to further enable the
item to be faster, more useful, or otherwise improved. Answer: smart
product
◉ A network of objects that transmit data to and from each other
without human interaction. Answer: internet of things
VERIFIED QUESTIONS AND SOLUTIONS
PREMIUM STUDY GUIDE
◉ The risk that customers or other creditors will fail to make
promised payments as they come due. Answer: credit risk
◉ The perceived amount of risk based on an individual's or
organization's opinion. Answer: subjective risk
◉ The measurable variation in uncertain outcomes based on facts
and data.. Answer: objective risk
◉ A risk that affects only some individuals, businesses, or small
groups.. Answer: diversifiable risk
◉ The potential for a major disruption in the function of an entire
market or financial system.. Answer: systemic risk
◉ Uncertainty about investments future value because of potential
changes in the market for that type of investment.. Answer: market
risk
, ◉ The risk that an asset cannot be sold on short notice without
incurring loss.. Answer: liquidity risk
◉ A foundation for applying the risk management process
throughout the organization.. Answer: risk management framework
◉ Information used as a basis for measuring the significance of a
risk.. Answer: risk criteria
◉ A system or process that an organization uses to achieve its
operational goals, internal and external financial reporting goals, or
legal and regulatory compliance goals.. Answer: internal control
◉ The use of emerging technologies in the insurance industry.
Answer: insurtech
◉ An innovative item that uses sensors; wireless sensor networks;
and data collection, transmission, and analysis to further enable the
item to be faster, more useful, or otherwise improved. Answer: smart
product
◉ A network of objects that transmit data to and from each other
without human interaction. Answer: internet of things
