ARM 400 PRACTICE EXAMS - ALL CHAPTERS
QUESTIONS AND ANSWERS
According to the law of large numbers, as the number of exposure units insured
increases, - Answers - The relative accuracy of predictions about future losses
increases
The fundamental purpose of a risk management framework is to - Answers - Integrate
risk management throughout the organization
Which one of the following provides a measure of the maximum potential damage
associated with an occurrence? - Answers - Exposure
Aligning risks with the organization's risk appetite defines - Answers - Tolerable
uncertainty
An organization must meet the standard of care that it owes to others in order to ensure
that - Answers - Legal obligations are satisfied
Julian was having a conversation with Tania, one of his employees. At this point, Julian
said, "What I hear you say is that you would like to take on more responsibility. Is that
correct?" Which one of the following elements of active listening was Julian illustrating?
- Answers - Response
During the past year, International Toys has undertaken four capital projects. The
company has renovated and refurbished one of its aging warehouse buildings. It has
purchased the most recent version of its current order processing computer software. It
has added two trucks to its fleet of delivery vehicles. Lastly, it has purchased a new
production machine that will allow it to launch a new product line. Which one of the
following company projects is the most speculative risk? - Answers - The new
production machine
Encouraging the expression of feelings as well as facts and following up with employees
on the problems they report are two ways that managers and supervisors can - Answers
- Cultivate two-way communication
Which one of the following risk management objectives is critical for a manufacturer
seeking new capital from investors, stockholders, and creditors? - Answers - Reduce
the deterrent effects of hazard risks
Which one of the following is a tool that can be used by fraud investigators to compare
documents and analyze notes? - Answers - Text mining
, 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 KRI based on a ratio? - Answers - Inventory turnover
Before speaking with a group or individual, the speaker should think about what he or
she wants the other person(s) to do as a result of the conversation. Which one of the
following steps in the communication process does the speaker complete by doing this?
- Answers - Set a clear communication objective
Mid-State Packing Company, a meat processing company, is the largest private sector
employer in Metro City. First National Bank of Metro City loans money to Mid-State
Packaging Company and to many of the employees of Mid-State. The problem with
First National Bank of Metro City loaning money to both the business and many
employees of the business is that - Answers - Loan defaults are likely to be highly
correlated
Which one of the following statements is true with regard to preventative analytics? -
Answers - Preventative analytics uses smart products and data analytics to identify root
loss causes and their implications.
The emerging technologies applied to risk assessment and control link the physical
domain to the virtual domain. Together, these domains linked by the emerging
technologies create a - Answers - connected ecosystem
In addition to metal detector, many airports have installed a second type of scanning
technology for baggage and cargo. The checked bags and cargo pass through a portal
with scanners programmed to detect and test for explosive trace fumes. These
scanners, which detect explosives based on air samples, are an example of what type
of sensor used for risk assessment and control? - Answers - Biochemical sensors
Which one of the following uses infrared light to detect nearby objects? - Answers -
Lidar
SIR's use of drones, video, real-term video scanning, and computer analysis illustrates
which one of the following? - Answers - Preventative analytics
Which one of the following should be part of an organization's standard operating
procedures (SOPs) concerning external stakeholder communications? - Answers -
Instructions regarding what types of information can and cannot be released
When interviewing a risk owner, which one of the following questions should be asked?
- Answers - What steps have been taken to ensure continuity of business in the event of
a natural disaster?
QUESTIONS AND ANSWERS
According to the law of large numbers, as the number of exposure units insured
increases, - Answers - The relative accuracy of predictions about future losses
increases
The fundamental purpose of a risk management framework is to - Answers - Integrate
risk management throughout the organization
Which one of the following provides a measure of the maximum potential damage
associated with an occurrence? - Answers - Exposure
Aligning risks with the organization's risk appetite defines - Answers - Tolerable
uncertainty
An organization must meet the standard of care that it owes to others in order to ensure
that - Answers - Legal obligations are satisfied
Julian was having a conversation with Tania, one of his employees. At this point, Julian
said, "What I hear you say is that you would like to take on more responsibility. Is that
correct?" Which one of the following elements of active listening was Julian illustrating?
- Answers - Response
During the past year, International Toys has undertaken four capital projects. The
company has renovated and refurbished one of its aging warehouse buildings. It has
purchased the most recent version of its current order processing computer software. It
has added two trucks to its fleet of delivery vehicles. Lastly, it has purchased a new
production machine that will allow it to launch a new product line. Which one of the
following company projects is the most speculative risk? - Answers - The new
production machine
Encouraging the expression of feelings as well as facts and following up with employees
on the problems they report are two ways that managers and supervisors can - Answers
- Cultivate two-way communication
Which one of the following risk management objectives is critical for a manufacturer
seeking new capital from investors, stockholders, and creditors? - Answers - Reduce
the deterrent effects of hazard risks
Which one of the following is a tool that can be used by fraud investigators to compare
documents and analyze notes? - Answers - Text mining
, 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 KRI based on a ratio? - Answers - Inventory turnover
Before speaking with a group or individual, the speaker should think about what he or
she wants the other person(s) to do as a result of the conversation. Which one of the
following steps in the communication process does the speaker complete by doing this?
- Answers - Set a clear communication objective
Mid-State Packing Company, a meat processing company, is the largest private sector
employer in Metro City. First National Bank of Metro City loans money to Mid-State
Packaging Company and to many of the employees of Mid-State. The problem with
First National Bank of Metro City loaning money to both the business and many
employees of the business is that - Answers - Loan defaults are likely to be highly
correlated
Which one of the following statements is true with regard to preventative analytics? -
Answers - Preventative analytics uses smart products and data analytics to identify root
loss causes and their implications.
The emerging technologies applied to risk assessment and control link the physical
domain to the virtual domain. Together, these domains linked by the emerging
technologies create a - Answers - connected ecosystem
In addition to metal detector, many airports have installed a second type of scanning
technology for baggage and cargo. The checked bags and cargo pass through a portal
with scanners programmed to detect and test for explosive trace fumes. These
scanners, which detect explosives based on air samples, are an example of what type
of sensor used for risk assessment and control? - Answers - Biochemical sensors
Which one of the following uses infrared light to detect nearby objects? - Answers -
Lidar
SIR's use of drones, video, real-term video scanning, and computer analysis illustrates
which one of the following? - Answers - Preventative analytics
Which one of the following should be part of an organization's standard operating
procedures (SOPs) concerning external stakeholder communications? - Answers -
Instructions regarding what types of information can and cannot be released
When interviewing a risk owner, which one of the following questions should be asked?
- Answers - What steps have been taken to ensure continuity of business in the event of
a natural disaster?
