ARM 400 RISK IN AN EVOLVING
WORLD REVIEW 2026 STUDY GUIDE
REVIEW SOLUTIONS
◉ Smart Product.
Answer: An innovative item that uses sensors' wireless sensor networks;
and date collection, transmission and analysis to further enable the item
to be faster, more useful and otherwise improved.
◉ Internet of Things (IoT).
Answer: A network of objects that transmit data to and from each other
without human interaction
◉ Cloud Computing.
Answer: Information, technology, and storage services contractually
provided from remote locations, through the internet or another network,
without a direct server connection.
◉ Blockchain.
Answer: A distributed digital ledger that facilitates secure transaction
without the need of the third party
◉ Telematics.
,Answer: The use of technological devices in vehicles with wireless
communication and GPS tracking that transmits data to a business or
government agency; some return info to the driver.
◉ Text Mining.
Answer: Obtaining information through language recognition
◉ Risk Appetite.
Answer: Amount of rick an organization is willing to take on in order to
achieve an anticipated result or return
◉ Value at Risk (VaR).
Answer: A technique to quantify financial risk by measuring the
likelihood of losing more than a specific dollar amount over a specific
period of time
◉ Cost of Risk.
Answer: The total cost incurred by an organization because of the
possibility of accidental loss
◉ Exposure.
Answer: Any condition that presents a possibility of gain or loss,
whether or not an actual loss occurs
◉ Volatility.
,Answer: Frequent fluctuations, such as in the price of an asset
◉ Likelihood.
Answer: A qualitative estimate of the certainty with which the outcome
of a specific event can be predicted
◉ Consequences.
Answer: The effects, positive or negative, of an occurrence
◉ Time Hosizon.
Answer: Estimated duration
◉ Correlation.
Answer: A relationship between variable
◉ Pure Risk.
Answer: A chance of loss or no loss, but no chance of gain
◉ Speculative Risk.
Answer: A chance of loss, no loss or gain
◉ Credit Risk.
Answer: The risk that customers or other creditors will fail to make
promised payments as they come due
, ◉ Subjective Risk.
Answer: The perceived amount of risk based on an individual's or
organizations opinion
◉ Objective Risk.
Answer: The measurable variation in uncertain outcomes based on facts
and data
◉ Diversifiable Risk.
Answer: A risk that affects only some individuals, businesses or small
groups
◉ Systemic Risk.
Answer: The potential for a major disruption in the function of an entire
market or financial system
◉ Market Risk.
Answer: Uncertainty about an investment's future value because of
potential chances in the market for that type of investment
◉ Liquidity Risk.
Answer: The risk that an asset cannot be sold on short notice without
incurring a loss
WORLD REVIEW 2026 STUDY GUIDE
REVIEW SOLUTIONS
◉ Smart Product.
Answer: An innovative item that uses sensors' wireless sensor networks;
and date collection, transmission and analysis to further enable the item
to be faster, more useful and otherwise improved.
◉ Internet of Things (IoT).
Answer: A network of objects that transmit data to and from each other
without human interaction
◉ Cloud Computing.
Answer: Information, technology, and storage services contractually
provided from remote locations, through the internet or another network,
without a direct server connection.
◉ Blockchain.
Answer: A distributed digital ledger that facilitates secure transaction
without the need of the third party
◉ Telematics.
,Answer: The use of technological devices in vehicles with wireless
communication and GPS tracking that transmits data to a business or
government agency; some return info to the driver.
◉ Text Mining.
Answer: Obtaining information through language recognition
◉ Risk Appetite.
Answer: Amount of rick an organization is willing to take on in order to
achieve an anticipated result or return
◉ Value at Risk (VaR).
Answer: A technique to quantify financial risk by measuring the
likelihood of losing more than a specific dollar amount over a specific
period of time
◉ Cost of Risk.
Answer: The total cost incurred by an organization because of the
possibility of accidental loss
◉ Exposure.
Answer: Any condition that presents a possibility of gain or loss,
whether or not an actual loss occurs
◉ Volatility.
,Answer: Frequent fluctuations, such as in the price of an asset
◉ Likelihood.
Answer: A qualitative estimate of the certainty with which the outcome
of a specific event can be predicted
◉ Consequences.
Answer: The effects, positive or negative, of an occurrence
◉ Time Hosizon.
Answer: Estimated duration
◉ Correlation.
Answer: A relationship between variable
◉ Pure Risk.
Answer: A chance of loss or no loss, but no chance of gain
◉ Speculative Risk.
Answer: A chance of loss, no loss or gain
◉ Credit Risk.
Answer: The risk that customers or other creditors will fail to make
promised payments as they come due
, ◉ Subjective Risk.
Answer: The perceived amount of risk based on an individual's or
organizations opinion
◉ Objective Risk.
Answer: The measurable variation in uncertain outcomes based on facts
and data
◉ Diversifiable Risk.
Answer: A risk that affects only some individuals, businesses or small
groups
◉ Systemic Risk.
Answer: The potential for a major disruption in the function of an entire
market or financial system
◉ Market Risk.
Answer: Uncertainty about an investment's future value because of
potential chances in the market for that type of investment
◉ Liquidity Risk.
Answer: The risk that an asset cannot be sold on short notice without
incurring a loss
