ARM 400 Questions from World-Class
Academics Practice Exam Questions
Expert-Reviewed Questions and Answers
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?
A. The two new trucks
B. The warehouse refurbishment
C. The software upgrade
D. The new production machine - -correct ans- -D
Which one of the following statements is true regarding the basic measures that apply to risk
management?
A. Consequences measure the degree to which an occurrence could positively or negatively
affect an organization.
B. Hedging is a risk management strategy that can reduce the risk of correlation.
C. Risk increases as volatility decreases.
D. Longer time horizons are generally less risky that shorter ones. - -correct ans- -A
Which one of the following provides a measure of the maximum potential damage associated
with an occurrence?
A. Exposure
,B. Duration
C. Underwriting risk
D. Maximum probable loss - -correct ans- -A
Samuel was recently hired as a risk management professional for Parker Property Management.
He has been asked by senior management to review the organization's current insurance policies
to make sure that the organization is adequately protected, and also see if there are any
opportunities to save on the premiums. Samuel must do which one of the following through
internal communication before he will be able to complete this task?
A. Determine the organization's risk appetite
B. Identify all of the risks that the organization faces
C. Earn the confidence of the organization's board of directors
D. Become familiar with industry regulations - -correct ans- -A
Risk management professionals must collaborate with data analysts during which two steps of
the risk management process?
A. Treat risks and monitor risk treatments
B. Scan the environment and analyze risks
C. Analyze risks and monitor risk treatments
D. Identify risks and treat risks - -correct ans- -C
Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out a need for
many organizations to evaluate and manage their A. Supply-chain risk. B. Derivative risk.
, C. Compliance risk.
D. Political risk. - -correct ans- -A
Asking a question such as "How do you think this will work out?" can help a speaker do which
one of the following?
A. Request feedback and determine if the message has been understood
B. Gain the support of executives and decision makers
C. Build trust among a diverse group of individuals
D. Deliver a message that recipients don't want to hear - -correct ans- -A
Carla, the risk manager, was asked by senior management to deliver a presentation on cyber risk
at an all employees meeting. Even though she was only allotted 30 minutes for her presentation,
Carla felt that cyber risk was a very real risk for the corporation and she wanted employees to
leave with some fear of it. She wanted to provide employees with as much technical information
as possible, and familiarize them with all of the important jargon. Less than 20 minutes into her
presentation, Carla could tell that many of the employees were not paying any attention to her
presentation. Which one of the following steps in the communication process had Carla failed to
consider?
A. Pay attention to your body language
B. Ask for feedback
C. Analyze your audience
D. Set a clear communication objective - -correct ans- -C
Which one of the following data capture tools has led to an explosion of risk management
innovation by allowing smart products to transmit data to each other and to central hubs?
A. Blockchain
Academics Practice Exam Questions
Expert-Reviewed Questions and Answers
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?
A. The two new trucks
B. The warehouse refurbishment
C. The software upgrade
D. The new production machine - -correct ans- -D
Which one of the following statements is true regarding the basic measures that apply to risk
management?
A. Consequences measure the degree to which an occurrence could positively or negatively
affect an organization.
B. Hedging is a risk management strategy that can reduce the risk of correlation.
C. Risk increases as volatility decreases.
D. Longer time horizons are generally less risky that shorter ones. - -correct ans- -A
Which one of the following provides a measure of the maximum potential damage associated
with an occurrence?
A. Exposure
,B. Duration
C. Underwriting risk
D. Maximum probable loss - -correct ans- -A
Samuel was recently hired as a risk management professional for Parker Property Management.
He has been asked by senior management to review the organization's current insurance policies
to make sure that the organization is adequately protected, and also see if there are any
opportunities to save on the premiums. Samuel must do which one of the following through
internal communication before he will be able to complete this task?
A. Determine the organization's risk appetite
B. Identify all of the risks that the organization faces
C. Earn the confidence of the organization's board of directors
D. Become familiar with industry regulations - -correct ans- -A
Risk management professionals must collaborate with data analysts during which two steps of
the risk management process?
A. Treat risks and monitor risk treatments
B. Scan the environment and analyze risks
C. Analyze risks and monitor risk treatments
D. Identify risks and treat risks - -correct ans- -C
Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out a need for
many organizations to evaluate and manage their A. Supply-chain risk. B. Derivative risk.
, C. Compliance risk.
D. Political risk. - -correct ans- -A
Asking a question such as "How do you think this will work out?" can help a speaker do which
one of the following?
A. Request feedback and determine if the message has been understood
B. Gain the support of executives and decision makers
C. Build trust among a diverse group of individuals
D. Deliver a message that recipients don't want to hear - -correct ans- -A
Carla, the risk manager, was asked by senior management to deliver a presentation on cyber risk
at an all employees meeting. Even though she was only allotted 30 minutes for her presentation,
Carla felt that cyber risk was a very real risk for the corporation and she wanted employees to
leave with some fear of it. She wanted to provide employees with as much technical information
as possible, and familiarize them with all of the important jargon. Less than 20 minutes into her
presentation, Carla could tell that many of the employees were not paying any attention to her
presentation. Which one of the following steps in the communication process had Carla failed to
consider?
A. Pay attention to your body language
B. Ask for feedback
C. Analyze your audience
D. Set a clear communication objective - -correct ans- -C
Which one of the following data capture tools has led to an explosion of risk management
innovation by allowing smart products to transmit data to each other and to central hubs?
A. Blockchain
