ARM 400 EXAM QUESTIONS AND THEIR
ANSWERS
Analyze risks and monitor risk treatments
Risk management professionals must collaborate with
data analysts during which two steps of the risk
management process?
Hazard risks
Which one of the following types of risks can result in
losses but not in any gains?
Loan defaults are likely to be highly correlated.
Loan defaults are likely to be highly correlated—if the
employer experiences financial trouble, it may have to
lay-off some employees who would default on their
loans.
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 Packing 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
Response
Julian was having a conversation with Tania, one of his
employees. At one 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?
Reduce the deterrent effects of hazard risks
Those who would provide an organization with new
capital seek assurances that the risk management
program reduces the deterrent effects of hazard risks.
Which one of the following risk management objectives is
critical for a manufacturer seeking new capital from
investors, stockholders, and creditors?
Consequences measure the degree to which an
occurrence could positively or negatively affect an
organization
Which one of the following statements is true regarding
the basic measures that apply to risk management?
Text mining can be used to compare documents and
analyze notes for various purposes
What can text mining be used for?
Scan Environment
Which one of the following is one of the five steps of the
risk management process?
Internal Auditing
The internal audit function can often provide
information regarding risks that aren't obvious, such
as employees creating a risk by not adhering to
certain processes
,Which one of the following is an internal source that can
often provide information regarding risks that aren't
obvious?
Social Responsibility
Social responsibility is the risk management program
goal that will most likely enhance an organization's
reputation.
Which one of the following risk management program
goals enhances an organization's reputation?
The rental property presents both pure and
speculative risk; property values may increase, and
the building could burn down.
The rental property presents both pure and
speculative risk; property values may increase or
decrease (speculative risk), rental income may create
a profit or loss (speculative risk), and the building
could burn down (pure risk).
George has received an inheritance and is deciding what
to do with the money. He has limited his options to four
choices: donate all the money to his favorite charity, use
the entire inheritance to buy a yacht, invest the inheritance
in a small rental property, or use the entire amount to
purchase T-bills. Which one of the following statements is
true regarding the risk involved in George's options?
They attempt to minimize threats and optimize
opportunities.
, While traditional risk managers concentrated on the
hazards posed to an organization, risk managers
today attempt to minimize threats and optimize
opportunities.
Risk managers today differ from traditional risk managers
in which one of the following ways?
Determine the organization's risk appetite
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?
Analyze your audience
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?
ANSWERS
Analyze risks and monitor risk treatments
Risk management professionals must collaborate with
data analysts during which two steps of the risk
management process?
Hazard risks
Which one of the following types of risks can result in
losses but not in any gains?
Loan defaults are likely to be highly correlated.
Loan defaults are likely to be highly correlated—if the
employer experiences financial trouble, it may have to
lay-off some employees who would default on their
loans.
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 Packing 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
Response
Julian was having a conversation with Tania, one of his
employees. At one 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?
Reduce the deterrent effects of hazard risks
Those who would provide an organization with new
capital seek assurances that the risk management
program reduces the deterrent effects of hazard risks.
Which one of the following risk management objectives is
critical for a manufacturer seeking new capital from
investors, stockholders, and creditors?
Consequences measure the degree to which an
occurrence could positively or negatively affect an
organization
Which one of the following statements is true regarding
the basic measures that apply to risk management?
Text mining can be used to compare documents and
analyze notes for various purposes
What can text mining be used for?
Scan Environment
Which one of the following is one of the five steps of the
risk management process?
Internal Auditing
The internal audit function can often provide
information regarding risks that aren't obvious, such
as employees creating a risk by not adhering to
certain processes
,Which one of the following is an internal source that can
often provide information regarding risks that aren't
obvious?
Social Responsibility
Social responsibility is the risk management program
goal that will most likely enhance an organization's
reputation.
Which one of the following risk management program
goals enhances an organization's reputation?
The rental property presents both pure and
speculative risk; property values may increase, and
the building could burn down.
The rental property presents both pure and
speculative risk; property values may increase or
decrease (speculative risk), rental income may create
a profit or loss (speculative risk), and the building
could burn down (pure risk).
George has received an inheritance and is deciding what
to do with the money. He has limited his options to four
choices: donate all the money to his favorite charity, use
the entire inheritance to buy a yacht, invest the inheritance
in a small rental property, or use the entire amount to
purchase T-bills. Which one of the following statements is
true regarding the risk involved in George's options?
They attempt to minimize threats and optimize
opportunities.
, While traditional risk managers concentrated on the
hazards posed to an organization, risk managers
today attempt to minimize threats and optimize
opportunities.
Risk managers today differ from traditional risk managers
in which one of the following ways?
Determine the organization's risk appetite
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?
Analyze your audience
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?
