ARM 401 EXAM PRACTICE QUESTIONS AND
ANSWERS GRADED A+ 100% VERIFIED.
A risk map showing a large difference between inherent and residual
risk indicates which one of the following?
A. The risk is within the organization's risk appetite
B. The current risk treatment is ineffective
C. The current risk treatment is effective
D. The risk does not need to be treated - C
Lucas, a risk professional for Jones Incorporated, recently met with
experts from the utility industry to discuss the potential loss of supply
and risks to the infrastructure. Lucas must now decide which risks, and
proposed treatments, need to be communicated to the board of Jones
Incorporated. Lucas should make this decision based on
A. The supply source involved.
B. The organization's risk appetite and tolerance levels.
C. Whether the risk in natural or man-made.
D. Whether any government regulations are involved or not. - B
,SoCal Movie Company produces movies at a studio in Southern
California. The risk manager decided to identify the range of potential
consequences associated with various risks that the company faces. For
example, if a severe earthquake occurred while the company was
filming a movie, there could be deaths and injuries, destruction of
movie sets, delays in production, costs associated with filming at an
alternative location, and loss of reputation and good will. The type of
analysis performed by the risk manager is called
A. SWOT analysis.
B. Scenario analysis.
C. Sensitivity analysis.
D. HAZOP analysis. - B
Insurance Company (IC) sells its coverages through independent
insurance agents. Independent agents represent several insurance
companies. Tom, the president of IC, has learned that the independent
agent who is the highest producer for IC is considering selling his
agency. IC is considering acquiring the agency since Tom is concerned
that if the agency is sold, IC may lose a substantial amount of business.
Tom asked IC's risk manager to analyse the prospective purchase. The
analysis revealed that the acquisition would likely secure most of IC's
book of business with the agency but also revealed local competitors
that would try to place the business as well. In addition, the analysis
revealed the opportunity for IC to move some accounts currently placed
with other insurers over to IC. Also, it was learned that a competitor
expressed an interest in the agency acquisition. The analysis performed
by the risk manager is a - D
,Murray Trucking is interested in evaluating which risk factors are most
likely to lead to the costliest accidents. They are evaluating risk factors
such as speed, weather conditions, driver experience, distance
travelled, and gross vehicle weight. Which one of the following
statistical measurements would be useful for the risk manager when
calculating the probability of the different risk factors causing severe
accidents?
A. Telematics
B. Inverse covariance
C. Variance
D. Monte Carlo simulation - C
Blithe Manufacturing has experienced a drop in market share. The
marketing department has come up with a way to differentiate their
product in order to regain market share. Blithe has assembled a team of
individuals representing different organizational functions to analyse
both internal and external factors of the new product and decide
whether or not it is feasible. Which one of the following team
approaches to risk identification is Blithe using?
A. Delphi technique
B. HAZOP workshop
C. SWOT analysis
D. Scenario analysis - C
, William is a project manager for Parker International. He has been
assigned a key project with a short deadline. William realizes that this
project is going to require revising the job duties of some individuals
and a collaborative effort from of all team members. When revising job
duties, William should do which one of the following?
A. Overload some individuals with more work than others
B. Try to enrich individuals' work rather than merely expand it
C. Rely on the most senior individuals to take on additional duties
D. Focus on the individuals' personality rather than results - B
Shelton Manufacturing executives are growing increasingly concerned
about wildfires and the potential effects on supply chain management.
As the risk professional, Carla has been asked to meet with experts on
the subject and report back to the executive team. Which one of the
following should Carla do before meet with external wildfire experts?
A. Carla should speak with internal subject-matter experts in hopes that
she can avoid needing the external wildfire experts.
B. Carla should research the field and get a working understanding of
wildfires.
C. Carla should solicit questions from internal experts and submit them
to the external wildfire experts.
D. Carla should try to learn as much as possible about wildfires, so she
can impress the wildfire experts. - B
ANSWERS GRADED A+ 100% VERIFIED.
A risk map showing a large difference between inherent and residual
risk indicates which one of the following?
A. The risk is within the organization's risk appetite
B. The current risk treatment is ineffective
C. The current risk treatment is effective
D. The risk does not need to be treated - C
Lucas, a risk professional for Jones Incorporated, recently met with
experts from the utility industry to discuss the potential loss of supply
and risks to the infrastructure. Lucas must now decide which risks, and
proposed treatments, need to be communicated to the board of Jones
Incorporated. Lucas should make this decision based on
A. The supply source involved.
B. The organization's risk appetite and tolerance levels.
C. Whether the risk in natural or man-made.
D. Whether any government regulations are involved or not. - B
,SoCal Movie Company produces movies at a studio in Southern
California. The risk manager decided to identify the range of potential
consequences associated with various risks that the company faces. For
example, if a severe earthquake occurred while the company was
filming a movie, there could be deaths and injuries, destruction of
movie sets, delays in production, costs associated with filming at an
alternative location, and loss of reputation and good will. The type of
analysis performed by the risk manager is called
A. SWOT analysis.
B. Scenario analysis.
C. Sensitivity analysis.
D. HAZOP analysis. - B
Insurance Company (IC) sells its coverages through independent
insurance agents. Independent agents represent several insurance
companies. Tom, the president of IC, has learned that the independent
agent who is the highest producer for IC is considering selling his
agency. IC is considering acquiring the agency since Tom is concerned
that if the agency is sold, IC may lose a substantial amount of business.
Tom asked IC's risk manager to analyse the prospective purchase. The
analysis revealed that the acquisition would likely secure most of IC's
book of business with the agency but also revealed local competitors
that would try to place the business as well. In addition, the analysis
revealed the opportunity for IC to move some accounts currently placed
with other insurers over to IC. Also, it was learned that a competitor
expressed an interest in the agency acquisition. The analysis performed
by the risk manager is a - D
,Murray Trucking is interested in evaluating which risk factors are most
likely to lead to the costliest accidents. They are evaluating risk factors
such as speed, weather conditions, driver experience, distance
travelled, and gross vehicle weight. Which one of the following
statistical measurements would be useful for the risk manager when
calculating the probability of the different risk factors causing severe
accidents?
A. Telematics
B. Inverse covariance
C. Variance
D. Monte Carlo simulation - C
Blithe Manufacturing has experienced a drop in market share. The
marketing department has come up with a way to differentiate their
product in order to regain market share. Blithe has assembled a team of
individuals representing different organizational functions to analyse
both internal and external factors of the new product and decide
whether or not it is feasible. Which one of the following team
approaches to risk identification is Blithe using?
A. Delphi technique
B. HAZOP workshop
C. SWOT analysis
D. Scenario analysis - C
, William is a project manager for Parker International. He has been
assigned a key project with a short deadline. William realizes that this
project is going to require revising the job duties of some individuals
and a collaborative effort from of all team members. When revising job
duties, William should do which one of the following?
A. Overload some individuals with more work than others
B. Try to enrich individuals' work rather than merely expand it
C. Rely on the most senior individuals to take on additional duties
D. Focus on the individuals' personality rather than results - B
Shelton Manufacturing executives are growing increasingly concerned
about wildfires and the potential effects on supply chain management.
As the risk professional, Carla has been asked to meet with experts on
the subject and report back to the executive team. Which one of the
following should Carla do before meet with external wildfire experts?
A. Carla should speak with internal subject-matter experts in hopes that
she can avoid needing the external wildfire experts.
B. Carla should research the field and get a working understanding of
wildfires.
C. Carla should solicit questions from internal experts and submit them
to the external wildfire experts.
D. Carla should try to learn as much as possible about wildfires, so she
can impress the wildfire experts. - B
