ARM 400 Risk in an Evolving World 2025
Latest Exam 200 Questions and Correct
Detailed Answers with Rationales / ARM 400
Exam 2025-2026 Practice Test Bank
Sec. A.1
According to the law of large numbers, as the number of exposure units insured
increases,
A. The size of the average loss declines.
B. Fewer losses are expected to occur.
C. The probability of an underwriting loss increases.
D. The relative accuracy of predictions about future losses increases. - ANSWER-
D. The relative accuracy of predictions about future losses increases.
Sec. A.1.
Risks from accidental loss, including the possibility of loss or no loss defines
A. Business risk.
B. Enterprise risk.
C. Hazard risk.
D. Operational risk. - ANSWER-C. Hazard risk.Correct. Risks from accidental
loss, including the possibility of loss or no loss defines hazard risk.
Sec. A.1.
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
pg. 1
,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. Earn the confidence of the organization's board of directors
B. Identify all of the risks that the organization faces
C. Determine the organization's risk appetite
D. Become familiar with industry regulations - ANSWER-C. Determine the
organization's risk appetite Correct. Samuel must determine the organization's risk
appetite through internal communication before he will be able to complete this
task.
Sec A.1.
Asking a question such as "How do you think this will work out?" can help a
speaker do which one of the following?
A. Gain the support of executives and decision makers
B. Request feedback and determine if the message has been understood
C. Build trust among a diverse group of individuals
D. Deliver a message that recipients don't want to hear - ANSWER-B. Request
feedback and determine if the message has been understood Correct. Asking a
question such as "How do you think this will work out?" can help a speaker to
request feedback and determine if the message has been understood.
Sec A.1.
Which one of the following is described as a distributed database that serves as a
collectively shared ledger?
A. The Internet of Thingscentral hubs.
B. Big data
C. Blockchain
pg. 2
,D. Telematics - ANSWER-C. Blockchain
Sec. A.1.
Which one of the following is one of the five steps of the risk management
process?
A. Allocate resources
B. Scan environment
C. Align and integrate
D. Establish accountability - ANSWER-B. Scan environment Correct. Scan
environment is one of the five steps of the risk management process.
Sec A.1.
Which one of the following provides a measure of the maximum potential damage
associated with an occurrence?
A. Duration
B. Exposure
C. Maximum probable loss
D. Underwriting risk - ANSWER-B. ExposureCorrect. Exposure provides a
measure of the maximum potential damage associated with an occurrence.
Sec A.1.
Which one of the following statements is true regarding the evolution of risk and
risk management?
A. Risk management is increasingly being applied to the risks associated with
accidental losses.
B. Risk management now involves only those areas where the organization has
some degree of control over the outcome.
pg. 3
, C. The definition of risk has evolved to include positive as well as negative
attributes.
D. The definitions of risk and risk management have become considerably more
focused over the years. - ANSWER-C. The definition of risk has evolved to
include positive as well as negative attributes.
Sec A.1.
Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out
a need for many organizations to evaluate and manage their
A. Compliance risk.
B. Political risk.
C. Supply-chain risk.
D. Derivative risk. - ANSWER-C. Supply-chain risk.Correct. Catastrophes such as
recent earthquakes and the 2011 tsunami in Japan pointed out a need for many
organizations to evaluate and manage their supply-chain risk.
Sc A.1.
Which one of the following risk management program goals enhances an
organization's reputation?
A. Survival
B. Tolerable uncertainty
C. Economy of operations
D. Social responsibility - ANSWER-D. Social responsibilityCorrect. Social
responsibility is the risk management program goal that will most likely enhance
an organization's reputation.
pg. 4
Latest Exam 200 Questions and Correct
Detailed Answers with Rationales / ARM 400
Exam 2025-2026 Practice Test Bank
Sec. A.1
According to the law of large numbers, as the number of exposure units insured
increases,
A. The size of the average loss declines.
B. Fewer losses are expected to occur.
C. The probability of an underwriting loss increases.
D. The relative accuracy of predictions about future losses increases. - ANSWER-
D. The relative accuracy of predictions about future losses increases.
Sec. A.1.
Risks from accidental loss, including the possibility of loss or no loss defines
A. Business risk.
B. Enterprise risk.
C. Hazard risk.
D. Operational risk. - ANSWER-C. Hazard risk.Correct. Risks from accidental
loss, including the possibility of loss or no loss defines hazard risk.
Sec. A.1.
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
pg. 1
,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. Earn the confidence of the organization's board of directors
B. Identify all of the risks that the organization faces
C. Determine the organization's risk appetite
D. Become familiar with industry regulations - ANSWER-C. Determine the
organization's risk appetite Correct. Samuel must determine the organization's risk
appetite through internal communication before he will be able to complete this
task.
Sec A.1.
Asking a question such as "How do you think this will work out?" can help a
speaker do which one of the following?
A. Gain the support of executives and decision makers
B. Request feedback and determine if the message has been understood
C. Build trust among a diverse group of individuals
D. Deliver a message that recipients don't want to hear - ANSWER-B. Request
feedback and determine if the message has been understood Correct. Asking a
question such as "How do you think this will work out?" can help a speaker to
request feedback and determine if the message has been understood.
Sec A.1.
Which one of the following is described as a distributed database that serves as a
collectively shared ledger?
A. The Internet of Thingscentral hubs.
B. Big data
C. Blockchain
pg. 2
,D. Telematics - ANSWER-C. Blockchain
Sec. A.1.
Which one of the following is one of the five steps of the risk management
process?
A. Allocate resources
B. Scan environment
C. Align and integrate
D. Establish accountability - ANSWER-B. Scan environment Correct. Scan
environment is one of the five steps of the risk management process.
Sec A.1.
Which one of the following provides a measure of the maximum potential damage
associated with an occurrence?
A. Duration
B. Exposure
C. Maximum probable loss
D. Underwriting risk - ANSWER-B. ExposureCorrect. Exposure provides a
measure of the maximum potential damage associated with an occurrence.
Sec A.1.
Which one of the following statements is true regarding the evolution of risk and
risk management?
A. Risk management is increasingly being applied to the risks associated with
accidental losses.
B. Risk management now involves only those areas where the organization has
some degree of control over the outcome.
pg. 3
, C. The definition of risk has evolved to include positive as well as negative
attributes.
D. The definitions of risk and risk management have become considerably more
focused over the years. - ANSWER-C. The definition of risk has evolved to
include positive as well as negative attributes.
Sec A.1.
Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out
a need for many organizations to evaluate and manage their
A. Compliance risk.
B. Political risk.
C. Supply-chain risk.
D. Derivative risk. - ANSWER-C. Supply-chain risk.Correct. Catastrophes such as
recent earthquakes and the 2011 tsunami in Japan pointed out a need for many
organizations to evaluate and manage their supply-chain risk.
Sc A.1.
Which one of the following risk management program goals enhances an
organization's reputation?
A. Survival
B. Tolerable uncertainty
C. Economy of operations
D. Social responsibility - ANSWER-D. Social responsibilityCorrect. Social
responsibility is the risk management program goal that will most likely enhance
an organization's reputation.
pg. 4
