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ARM 402 Successfully Treating Risk Exam Test
Banks A & B Bundle with 400 Recent Exam
Questions and Correct Answers/ ARM 402 Exam
Test Bank
Risk Treatment - The selection and implementation of
actions to help manage or mitigate a risk.
Residual Risk - The level of risk remaining after actions
are taken to alter the level of risk.
Avoidance - A risk control technique that involves
ceasing or never undertaking an activity so that the
possibility of a future loss occurring from that activity is
eliminated.
Loss Prevention - A risk control technique that reduces
the frequency of a particular loss.
Loss Reduction - A risk control technique that reduces
the severity of a particular loss.
Risk Transfer - The shifting of risk from one individual or
organization to another.
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Retention - A risk financing technique that involves
assumption of risk in which gains and losses are retained
within the organization.
Risk Financing - A risk management technique that
includes steps to pay for or transfer the costs of losses.
Hedging - A financial transaction in which one asset is
held to offset the risk associated with another asset.
Derivative - financial instrument whose value derives
from the value of an underlying asset, which can be an
index, an asset, yield on an asset, weather conditions,
inflation, loans, bonds, an insurance risk, or other items.
Diversification - A risk control technique that spreads
loss exposures over numerous projects, products,
markets, or regions.
Pure Risk - A chance of loss or no loss, but no chance of
gain.
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Speculative Risk - A chance of loss, no loss, or gain.
Covariance - The relative association between variables
to move in tandem or independently of each other.
Correlation - A relationship between variables.
Ethos - Character (credibility)
Logos - Reason (logic)
Pathos - Emotion
Insurance - A risk management technique that transfers
the potential financial consequences of certain specified
loss exposures from the insured to the insurer.
Hazard Risk - Risk that arises from property, liability, or
personnel loss exposures.
Operational Risk - Risk that arises from people,
processes, systems, or controls.
ARM 402 Successfully Treating Risk Exam Test
Banks A & B Bundle with 400 Recent Exam
Questions and Correct Answers/ ARM 402 Exam
Test Bank
Risk Treatment - The selection and implementation of
actions to help manage or mitigate a risk.
Residual Risk - The level of risk remaining after actions
are taken to alter the level of risk.
Avoidance - A risk control technique that involves
ceasing or never undertaking an activity so that the
possibility of a future loss occurring from that activity is
eliminated.
Loss Prevention - A risk control technique that reduces
the frequency of a particular loss.
Loss Reduction - A risk control technique that reduces
the severity of a particular loss.
Risk Transfer - The shifting of risk from one individual or
organization to another.
,2|Page
Retention - A risk financing technique that involves
assumption of risk in which gains and losses are retained
within the organization.
Risk Financing - A risk management technique that
includes steps to pay for or transfer the costs of losses.
Hedging - A financial transaction in which one asset is
held to offset the risk associated with another asset.
Derivative - financial instrument whose value derives
from the value of an underlying asset, which can be an
index, an asset, yield on an asset, weather conditions,
inflation, loans, bonds, an insurance risk, or other items.
Diversification - A risk control technique that spreads
loss exposures over numerous projects, products,
markets, or regions.
Pure Risk - A chance of loss or no loss, but no chance of
gain.
, 3|Page
Speculative Risk - A chance of loss, no loss, or gain.
Covariance - The relative association between variables
to move in tandem or independently of each other.
Correlation - A relationship between variables.
Ethos - Character (credibility)
Logos - Reason (logic)
Pathos - Emotion
Insurance - A risk management technique that transfers
the potential financial consequences of certain specified
loss exposures from the insured to the insurer.
Hazard Risk - Risk that arises from property, liability, or
personnel loss exposures.
Operational Risk - Risk that arises from people,
processes, systems, or controls.
