ARM 401 Exam Practice Rated 100%
Correct 2025-2026
Introduction:
This document contains a complete set of ARM 401 exam practice
questions with verified correct answers for the academic year
2025-2026. It covers key concepts in risk management, including
root cause analysis, fault tree and event tree analysis, Monte Carlo
simulation, regression, probability distributions, risk control
techniques, operational and financial risk, cyber risk, and
reputation risk. The material is designed to prepare students for
exams by providing multiple-choice practice questions with
indicated correct answers.
Exam Questions and Answers:
Which one of the following statements about root cause analysis
(RCA) is true?
A. Root cause analysis is aimed at reducing the harmful effects of a
loss once the loss has occurred.
B. A root cause must produce effective recommendations for
prevention of future accidents.
C. The first step in root cause analysis is analyzing causal factors.
D. Weather conditions and earthquakes can be considered root
causes for some losses. --- correct answer ---B
,A systematic procedure that uses the results of other analysis
techniques to identify the predominant determinants of an accident
is called
A. Fault tree analysis.
B. Root cause analysis.
C. "5 Whys" analysis.
D. Failure mode and effects analysis. --- correct answer ---B
New Houma Mortgage Company leases a fleet of automobiles for its
real estate appraisers. During her review of recent vehicular
accidents, their risk manager is trying to identify failures, human
and/or mechanical, in order to target corrective actions and
prevent future losses by looking at ways in which these accidents
occurred and ways in which the frequency or severity can be
reduced. This is an example of the
A. Future states analysis.
B. Technique of operations review approach.
C. System safety technique.
D. Sequence of events analysis. --- correct answer ---C
An organization may use several forms of analysis to prioritize
risks and maximize risk control resources. Under one type of
analysis, the direction of reasoning in fault tree analysis is reversed
,by starting with causes and branching out to consequences. This
type of analysis is called
A. "5 Whys" analysis.
B. Root cause analysis.
C. Failure mode and effects analysis.
D. Sensitivity analysis. --- correct answer ---C
Tom works as a safety engineer at Cold Rolled Steep Corporation.
During a system safety analysis, he identified the important
components of the production process and has ranked the severity
of losing each component into four failure categories. This is an
attempt to establish priorities of the hazards and controls. Which
one of the following analyses is Tom using?
A. Criticality analysis
B. Casual factor analysis
C. Failure mode and effects analysis
D. Job safety analysis --- correct answer ---A
One form of root cause analysis utilizes a fishbone diagram. Under
this technique, a team of investigators brainstorms the causes of a
risk event, sorts them into categories, and traces them to their
origin. This type of analysis relies heavily on a
A. Failure mode and effects analysis (FMEA).
B. Sensitivity analysis.
, C. Scenario analysis.
D. "5 Whys" analysis. --- correct answer ---D
Which one of the following is the initiating event in an event tree
analysis?
A. Automatic sprinkler system is not activated
B. Lightning strikes a warehouse building while it is closed for the
weekend
C. Warehouse building catches fire due to lightning
D. Detection system notifies the fire department --- correct answer
---B
The outcomes in a continuous probability distribution are called
probability
A. Data points.
B. Severity distributions.
C. Distribution values.
D. Density functions. --- correct answer ---D
In a normal distribution, fewer than 5% of outcomes are
A. Between one and two standard deviations above or below the
mean.
B. Outside two standard deviations above or below the mean.
Correct 2025-2026
Introduction:
This document contains a complete set of ARM 401 exam practice
questions with verified correct answers for the academic year
2025-2026. It covers key concepts in risk management, including
root cause analysis, fault tree and event tree analysis, Monte Carlo
simulation, regression, probability distributions, risk control
techniques, operational and financial risk, cyber risk, and
reputation risk. The material is designed to prepare students for
exams by providing multiple-choice practice questions with
indicated correct answers.
Exam Questions and Answers:
Which one of the following statements about root cause analysis
(RCA) is true?
A. Root cause analysis is aimed at reducing the harmful effects of a
loss once the loss has occurred.
B. A root cause must produce effective recommendations for
prevention of future accidents.
C. The first step in root cause analysis is analyzing causal factors.
D. Weather conditions and earthquakes can be considered root
causes for some losses. --- correct answer ---B
,A systematic procedure that uses the results of other analysis
techniques to identify the predominant determinants of an accident
is called
A. Fault tree analysis.
B. Root cause analysis.
C. "5 Whys" analysis.
D. Failure mode and effects analysis. --- correct answer ---B
New Houma Mortgage Company leases a fleet of automobiles for its
real estate appraisers. During her review of recent vehicular
accidents, their risk manager is trying to identify failures, human
and/or mechanical, in order to target corrective actions and
prevent future losses by looking at ways in which these accidents
occurred and ways in which the frequency or severity can be
reduced. This is an example of the
A. Future states analysis.
B. Technique of operations review approach.
C. System safety technique.
D. Sequence of events analysis. --- correct answer ---C
An organization may use several forms of analysis to prioritize
risks and maximize risk control resources. Under one type of
analysis, the direction of reasoning in fault tree analysis is reversed
,by starting with causes and branching out to consequences. This
type of analysis is called
A. "5 Whys" analysis.
B. Root cause analysis.
C. Failure mode and effects analysis.
D. Sensitivity analysis. --- correct answer ---C
Tom works as a safety engineer at Cold Rolled Steep Corporation.
During a system safety analysis, he identified the important
components of the production process and has ranked the severity
of losing each component into four failure categories. This is an
attempt to establish priorities of the hazards and controls. Which
one of the following analyses is Tom using?
A. Criticality analysis
B. Casual factor analysis
C. Failure mode and effects analysis
D. Job safety analysis --- correct answer ---A
One form of root cause analysis utilizes a fishbone diagram. Under
this technique, a team of investigators brainstorms the causes of a
risk event, sorts them into categories, and traces them to their
origin. This type of analysis relies heavily on a
A. Failure mode and effects analysis (FMEA).
B. Sensitivity analysis.
, C. Scenario analysis.
D. "5 Whys" analysis. --- correct answer ---D
Which one of the following is the initiating event in an event tree
analysis?
A. Automatic sprinkler system is not activated
B. Lightning strikes a warehouse building while it is closed for the
weekend
C. Warehouse building catches fire due to lightning
D. Detection system notifies the fire department --- correct answer
---B
The outcomes in a continuous probability distribution are called
probability
A. Data points.
B. Severity distributions.
C. Distribution values.
D. Density functions. --- correct answer ---D
In a normal distribution, fewer than 5% of outcomes are
A. Between one and two standard deviations above or below the
mean.
B. Outside two standard deviations above or below the mean.
