ARM 402 PRACTICE COMPREHENSIVE TEST
PAPER 2026 COMPLETE QUESTIONS AND
ANSWERS EXPERT VERIFIED GRADED A+
◉ Which one of the following risk control techniques might actually
increase loss frequency?
A) Loss prevention
B) Separation
C) Loss reduction
D) Diversification. Answer: B
◉ The lease for a tenant's occupancy of an office space states that
the tenant will maintain the property in reasonable condition. The
tenant fails to clear ice and snow from the property and a passerby
falls and is injured. On what basis might the tenant most likely be
liable for the passerby's injuries?
A) Breach of contract
B) Negligence
C) Strict liability
D) Tort. Answer: A
,◉ Taylor owns Paoli Hardware, a mid-sized hardware store with 25
employees. Paoli Hardware has won best local hardware store 3
years in a row. Taylor would like to expand operations and has
undertaken a SWOT analysis.
His most dedicated customers are generally over 40 years old and
engaged in small house projects, but his biggest revenue generator
continues to be the sale of lumber. He would like to obtain more
commercial customers and increase lumber sales.
One of the major complaints Taylor hears from his customers is the
difficulty finding local contractors. So, he is considering hiring a
general contractor at the store who would also make house calls to
assist customers. This will allow him to bill for labor and increase
the sale of his products, but he is concerned it may increase his
insurance claims and premiums.
One of the younger store employees suggested they create a website
to expand sales to on-line purcha. Answer: A
◉ A patent used for the invention of a machine is a
A) Plant patent
B) Design patent
C) Utility patent
D) Process patent. Answer: C
, ◉ All members of a pool share in the risk with the other members of
the pool. This allows the pool to manage uncertainty and meet
which one of the other risk financing goals?
A) Pay for Losses
B) Minimize the Cost of Risk
C) Maintain Liquidity
D) Comply with Legal & Regulatory Requirements. Answer: 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. Answer: B
PAPER 2026 COMPLETE QUESTIONS AND
ANSWERS EXPERT VERIFIED GRADED A+
◉ Which one of the following risk control techniques might actually
increase loss frequency?
A) Loss prevention
B) Separation
C) Loss reduction
D) Diversification. Answer: B
◉ The lease for a tenant's occupancy of an office space states that
the tenant will maintain the property in reasonable condition. The
tenant fails to clear ice and snow from the property and a passerby
falls and is injured. On what basis might the tenant most likely be
liable for the passerby's injuries?
A) Breach of contract
B) Negligence
C) Strict liability
D) Tort. Answer: A
,◉ Taylor owns Paoli Hardware, a mid-sized hardware store with 25
employees. Paoli Hardware has won best local hardware store 3
years in a row. Taylor would like to expand operations and has
undertaken a SWOT analysis.
His most dedicated customers are generally over 40 years old and
engaged in small house projects, but his biggest revenue generator
continues to be the sale of lumber. He would like to obtain more
commercial customers and increase lumber sales.
One of the major complaints Taylor hears from his customers is the
difficulty finding local contractors. So, he is considering hiring a
general contractor at the store who would also make house calls to
assist customers. This will allow him to bill for labor and increase
the sale of his products, but he is concerned it may increase his
insurance claims and premiums.
One of the younger store employees suggested they create a website
to expand sales to on-line purcha. Answer: A
◉ A patent used for the invention of a machine is a
A) Plant patent
B) Design patent
C) Utility patent
D) Process patent. Answer: C
, ◉ All members of a pool share in the risk with the other members of
the pool. This allows the pool to manage uncertainty and meet
which one of the other risk financing goals?
A) Pay for Losses
B) Minimize the Cost of Risk
C) Maintain Liquidity
D) Comply with Legal & Regulatory Requirements. Answer: 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. Answer: B
