ARM 400 COMPREHENSIVE STUDY GUIDE
FULL QUESTIONS WITH ACCURATE
SOLUTIONS
●● The fundamental purpose of a risk management framework is to
Answer: Integrate risk management throughout the organization
●● Which one of the following provides a measure of the maximum
potential damage associated with an occurrence?
Answer: Exposure
●● Aligning risks with the organization's risk appetite defines
Answer: Tolerable uncertainty
●● An organization must meet the standard of care that it owes to others
in order to ensure that
Answer: Legal obligations are satisfied
●● Julian was having a conversation with Tania, one of his employees.
At this 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?
Answer: Response
,●● 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?
Answer: The new production machine
●● Encouraging the expression of feelings as well as facts and following
up with employees on the problems they report are two ways that
managers and supervisors can
Answer: Cultivate two-way communication
●● Which one of the following risk management objectives is critical
for a manufacturer seeking new capital from investors, stockholders, and
creditors?
Answer: Reduce the deterrent effects of hazard risks
●● Which one of the following is a tool that can be used by fraud
investigators to compare documents and analyze notes?
Answer: Text mining
, ●● For an organization, a key performance indicator (KPI) measures the
performance of a specific activity at a predetermined level or amount.
Which one of the following is an example of a KRI based on a ratio?
Answer: Inventory turnover
●● Before speaking with a group or individual, the speaker should think
about what he or she wants the other person(s) to do as a result of the
conversation. Which one of the following steps in the communication
process does the speaker complete by doing this?
Answer: Set a clear communication objective
●● 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 Packaging 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
Answer: Loan defaults are likely to be highly correlated
●● Which one of the following statements is true with regard to
preventative analytics?
Answer: Preventative analytics uses smart products and data analytics to
identify root loss causes and their implications.
FULL QUESTIONS WITH ACCURATE
SOLUTIONS
●● The fundamental purpose of a risk management framework is to
Answer: Integrate risk management throughout the organization
●● Which one of the following provides a measure of the maximum
potential damage associated with an occurrence?
Answer: Exposure
●● Aligning risks with the organization's risk appetite defines
Answer: Tolerable uncertainty
●● An organization must meet the standard of care that it owes to others
in order to ensure that
Answer: Legal obligations are satisfied
●● Julian was having a conversation with Tania, one of his employees.
At this 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?
Answer: Response
,●● 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?
Answer: The new production machine
●● Encouraging the expression of feelings as well as facts and following
up with employees on the problems they report are two ways that
managers and supervisors can
Answer: Cultivate two-way communication
●● Which one of the following risk management objectives is critical
for a manufacturer seeking new capital from investors, stockholders, and
creditors?
Answer: Reduce the deterrent effects of hazard risks
●● Which one of the following is a tool that can be used by fraud
investigators to compare documents and analyze notes?
Answer: Text mining
, ●● For an organization, a key performance indicator (KPI) measures the
performance of a specific activity at a predetermined level or amount.
Which one of the following is an example of a KRI based on a ratio?
Answer: Inventory turnover
●● Before speaking with a group or individual, the speaker should think
about what he or she wants the other person(s) to do as a result of the
conversation. Which one of the following steps in the communication
process does the speaker complete by doing this?
Answer: Set a clear communication objective
●● 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 Packaging 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
Answer: Loan defaults are likely to be highly correlated
●● Which one of the following statements is true with regard to
preventative analytics?
Answer: Preventative analytics uses smart products and data analytics to
identify root loss causes and their implications.
