A.R.M. 400 EXAM
Which one of the following best explains why the audience should be
known for effective enterprise risk management (ERM)
communication?
A. Only technical communications need to address specific audiences;
financial and legal communications should be worded for all
audiences.
B. Communications do not need to address specific audiences; all
communications should be available for review by any stakeholder.
C. The communication must address the level of technical, legal or
financial understanding of - ANSWERS-C
An organization evaluates the social environment as part of its
enterprise risk management (ERM) because
A. Society is in a constant state of change.
B. New sales or production methodology can affect consumers.
C. Society norms and values influence how an organization manages
its risks. - ANSWERS-C
Business process management (BPM) focuses on coordinating all
activities of an organization on which one of the following?
A. Technology
B. Profitability
C. Regulatory requirements
D. Client satisfaction - ANSWERS-D
,Risk leadership structures and approaches vary significantly, based on
an organization's size, culture, risk profile, and complexity. Which
one of the following statements is correct with respect to risk
champions?
A. They use their judgment and experience to develop information
about unquantifiable uncertainties and to detect vulnerabilities.
B. They ensure the organization's compliance with regulatory and
stakeholder requirements by creating a framework of standards and
controls.
C. They often - ANSWERS-C
During the international financial crisis of 2008-2009, banking
regulators in the U.S., Europe, and Asia developed bank stress tests to
identify financial institutions that posed a significant threat to the
national and international economy. These capital adequacy measures
were applied only to those large financial institutions that posed the
most significant threat. Which one of the following types of
regulation would these stress tests be best classified as?
A. Rules-based regulation
B. Evide - ANSWERS-C
Sean recently started a small consulting practice. Sean is the only
employee of the business and the sole generator of revenue. Sean is
very concerned that in the event that he becomes disabled due to an
accident or disease there will be no revenue coming into the business.
Which one of the following goals best identify Sean's concerns?
A. Legality and profitability
,B. Tolerable uncertainty and earnings stability
C. Social responsibility and earnings stability
D. Economy of operations and surviv - ANSWERS-B
Corporate officers and boards of directors have the ultimate
responsibility for ensuring that corporations meet or exceed legal and
regulatory requirements. Which one of the following statements is
correct with respect to the role of directors and officers?
A. In part because of the 2008-2009 financial crisis, regulation now
holds boards of directors fully accountable to their shareholders, the
public, and other stakeholders.
B. Directors and officers are generally not responsible for balancing -
ANSWERS-D
When communicating a decision up the organization's chain of
command, consulting with outside experts can help a risk
management professional do which one of the following?
A. Seek feedback from stakeholders
B. Stay focused on the organization's objectives
C. Define the organization's risk appetite
D. Enhance stakeholders' confidence in the process - ANSWERS-D
Which of the following risk management program goals is an
essential goal for all public entities?
A. Earning stability
B. Continuity of operations
, C. Growth
D. Survival - ANSWERS-B
The traditional definition of risk management reflects the traditional
concept of risk as
A. Both positive and negative.
B. Negative.
C. Uncontrollable.
D. Strategic. - ANSWERS-B
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 tr - ANSWERS-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.
Which one of the following best explains why the audience should be
known for effective enterprise risk management (ERM)
communication?
A. Only technical communications need to address specific audiences;
financial and legal communications should be worded for all
audiences.
B. Communications do not need to address specific audiences; all
communications should be available for review by any stakeholder.
C. The communication must address the level of technical, legal or
financial understanding of - ANSWERS-C
An organization evaluates the social environment as part of its
enterprise risk management (ERM) because
A. Society is in a constant state of change.
B. New sales or production methodology can affect consumers.
C. Society norms and values influence how an organization manages
its risks. - ANSWERS-C
Business process management (BPM) focuses on coordinating all
activities of an organization on which one of the following?
A. Technology
B. Profitability
C. Regulatory requirements
D. Client satisfaction - ANSWERS-D
,Risk leadership structures and approaches vary significantly, based on
an organization's size, culture, risk profile, and complexity. Which
one of the following statements is correct with respect to risk
champions?
A. They use their judgment and experience to develop information
about unquantifiable uncertainties and to detect vulnerabilities.
B. They ensure the organization's compliance with regulatory and
stakeholder requirements by creating a framework of standards and
controls.
C. They often - ANSWERS-C
During the international financial crisis of 2008-2009, banking
regulators in the U.S., Europe, and Asia developed bank stress tests to
identify financial institutions that posed a significant threat to the
national and international economy. These capital adequacy measures
were applied only to those large financial institutions that posed the
most significant threat. Which one of the following types of
regulation would these stress tests be best classified as?
A. Rules-based regulation
B. Evide - ANSWERS-C
Sean recently started a small consulting practice. Sean is the only
employee of the business and the sole generator of revenue. Sean is
very concerned that in the event that he becomes disabled due to an
accident or disease there will be no revenue coming into the business.
Which one of the following goals best identify Sean's concerns?
A. Legality and profitability
,B. Tolerable uncertainty and earnings stability
C. Social responsibility and earnings stability
D. Economy of operations and surviv - ANSWERS-B
Corporate officers and boards of directors have the ultimate
responsibility for ensuring that corporations meet or exceed legal and
regulatory requirements. Which one of the following statements is
correct with respect to the role of directors and officers?
A. In part because of the 2008-2009 financial crisis, regulation now
holds boards of directors fully accountable to their shareholders, the
public, and other stakeholders.
B. Directors and officers are generally not responsible for balancing -
ANSWERS-D
When communicating a decision up the organization's chain of
command, consulting with outside experts can help a risk
management professional do which one of the following?
A. Seek feedback from stakeholders
B. Stay focused on the organization's objectives
C. Define the organization's risk appetite
D. Enhance stakeholders' confidence in the process - ANSWERS-D
Which of the following risk management program goals is an
essential goal for all public entities?
A. Earning stability
B. Continuity of operations
, C. Growth
D. Survival - ANSWERS-B
The traditional definition of risk management reflects the traditional
concept of risk as
A. Both positive and negative.
B. Negative.
C. Uncontrollable.
D. Strategic. - ANSWERS-B
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 tr - ANSWERS-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.
