A.R.M. 400 EXAM PRACTICE 240
QUESTIONS WITH 100 PERCENT CORRECT
ANSWERS VERIFIED 91 PAGES
CERTIFICATION TEST SCRIPT 2026 FULL
QUESTIONS AND SOLUTIONS GRADED A+
⩥Organizations use key risk indicators (KRIs) to plan for and respond to
risk. Which one of the following statements is correct with respect to
KRIs?
A. A KRI can reveal an upward trend in the level of a risk that, if it
continues, will exceed the designated risk threshold for that risk.
B. KRIs are effective internal indicators of changes such as budget
variances; however they are not effective external indicators.
C. An organization's risk criteria, predefined tolerance ranges that
measure variances from expected outcomes, are based on risk
thresholds.
D. Risk criteria relating to an organization's strategic risks generally do
not serve as the bases for KRIs, which tend to be operational in focus.
Answer: A
⩥Organizations use key risk indicators (KRIs) to plan for and respond to
A. Failure.
B. Risk.
,C. Questions.
D. Emergencies.. Answer: B
⩥Which one of the following statements is true regarding the business
process management (BPM) life cycle model?
A. The model is driven by the collaboration of human and technological
input.
B. The model is designed to review one business process at a time.
C. The model is primarily used by organizations in the manufacturing
sector.
D. The model is ineffective unless all five steps are completed on a
continuous basis.. Answer: A
⩥Carbon Manufacturing Company just hired a new chief risk officer
(CRO) and one of his first tasks was to recommend updated key risk
indicators (KRIs) to the chief executive officer (CEO). The CEO was
especially interested in KRIs measuring the company's profitability. One
area of measurement that the new CRO might want to use is
A. Personnel changes.
B. Customer invoices.
C. Customer orders.
D. Aged accounts receivable.. Answer: D
,⩥The business process management (BPM) life cycle incorporates five
steps. Which one of the following best describes the first step in the
BPM process?
A. Critical processes that support achievement of the organization's
goals are selected for analysis.
B. Processes are modeled to identify the organization's response to what-
if scenarios.
C. Processes are designed or redesigned by considering workflows and
affected personnel.
D. Processes are tracked so that statistics on their performance can be
gathered.. Answer: C
⩥For an organization, a key performance indicator (KPI) measures the
performance of a specific activity at a predetermined level or amount.
Which one of the following is an example of a KPI based on a ratio?
A. Customer-focused website
B. High employee morale
C. Safe transport of customer goods
D. Inventory turnover. Answer: D
⩥North American Furnishings is using business process management to
help it identify risks that threaten its processes. Which one of the
following risks would be considered an internal risk?
A. The loss of available materials due to tornadoes
B. The loss of skilled craftspeople due to retirement
, C. The drop in demand due to rising interest rates
D. The rise in the cost of materials due to new forestry regulations.
Answer: B
⩥Which one of the following is an example of an internal key risk
indicator (KRI) that a contractor might monitor?
A. Cost of lumber
B. Interest rates
C. Availability of skilled labor
D. Budget variances. Answer: D
⩥One of the strategic objectives for Cromley Insurance Group is
customer satisfaction. Which one of the following is a critical success
factor (CSF) that would help refine this strategic objective?
A. High profitability
B. Increase retention ratio by 5%
C. Reduce claim activity by 4 to 6%
D. High customer retention. Answer: D
⩥Which one of the following answers the question, "What shows we are
a success?"
A. Risk tolerance level
B. Strategic objective
QUESTIONS WITH 100 PERCENT CORRECT
ANSWERS VERIFIED 91 PAGES
CERTIFICATION TEST SCRIPT 2026 FULL
QUESTIONS AND SOLUTIONS GRADED A+
⩥Organizations use key risk indicators (KRIs) to plan for and respond to
risk. Which one of the following statements is correct with respect to
KRIs?
A. A KRI can reveal an upward trend in the level of a risk that, if it
continues, will exceed the designated risk threshold for that risk.
B. KRIs are effective internal indicators of changes such as budget
variances; however they are not effective external indicators.
C. An organization's risk criteria, predefined tolerance ranges that
measure variances from expected outcomes, are based on risk
thresholds.
D. Risk criteria relating to an organization's strategic risks generally do
not serve as the bases for KRIs, which tend to be operational in focus.
Answer: A
⩥Organizations use key risk indicators (KRIs) to plan for and respond to
A. Failure.
B. Risk.
,C. Questions.
D. Emergencies.. Answer: B
⩥Which one of the following statements is true regarding the business
process management (BPM) life cycle model?
A. The model is driven by the collaboration of human and technological
input.
B. The model is designed to review one business process at a time.
C. The model is primarily used by organizations in the manufacturing
sector.
D. The model is ineffective unless all five steps are completed on a
continuous basis.. Answer: A
⩥Carbon Manufacturing Company just hired a new chief risk officer
(CRO) and one of his first tasks was to recommend updated key risk
indicators (KRIs) to the chief executive officer (CEO). The CEO was
especially interested in KRIs measuring the company's profitability. One
area of measurement that the new CRO might want to use is
A. Personnel changes.
B. Customer invoices.
C. Customer orders.
D. Aged accounts receivable.. Answer: D
,⩥The business process management (BPM) life cycle incorporates five
steps. Which one of the following best describes the first step in the
BPM process?
A. Critical processes that support achievement of the organization's
goals are selected for analysis.
B. Processes are modeled to identify the organization's response to what-
if scenarios.
C. Processes are designed or redesigned by considering workflows and
affected personnel.
D. Processes are tracked so that statistics on their performance can be
gathered.. Answer: C
⩥For an organization, a key performance indicator (KPI) measures the
performance of a specific activity at a predetermined level or amount.
Which one of the following is an example of a KPI based on a ratio?
A. Customer-focused website
B. High employee morale
C. Safe transport of customer goods
D. Inventory turnover. Answer: D
⩥North American Furnishings is using business process management to
help it identify risks that threaten its processes. Which one of the
following risks would be considered an internal risk?
A. The loss of available materials due to tornadoes
B. The loss of skilled craftspeople due to retirement
, C. The drop in demand due to rising interest rates
D. The rise in the cost of materials due to new forestry regulations.
Answer: B
⩥Which one of the following is an example of an internal key risk
indicator (KRI) that a contractor might monitor?
A. Cost of lumber
B. Interest rates
C. Availability of skilled labor
D. Budget variances. Answer: D
⩥One of the strategic objectives for Cromley Insurance Group is
customer satisfaction. Which one of the following is a critical success
factor (CSF) that would help refine this strategic objective?
A. High profitability
B. Increase retention ratio by 5%
C. Reduce claim activity by 4 to 6%
D. High customer retention. Answer: D
⩥Which one of the following answers the question, "What shows we are
a success?"
A. Risk tolerance level
B. Strategic objective
