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ARM 401 Exam Practice 2024/2025 already graded A+
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ARM 401 Exam Practice 2024/2025 already graded A+
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ARM 401 Exam PracticeA 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 - ANSC
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. - ANSB
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. - ANSB
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 analyze 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 - ANSD
,Murray Trucking is interested in evaluating which risk factors are most likely to lead to the most
costly accidents. They are evaluating risk factors such as speed, weather conditions, driver
experience, distance traveled, 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 - ANSC
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 analyze 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 - ANSC
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 - ANSB
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 meeting 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. - ANSB
An organization practicing holistic risk management would assess the cost of raw materials and
foreign exchange risk under which one of the following quadrants of risk?
A. Strategic risk
,B. Financial risk
C. Operational risk
D. Hazard risk - ANSB
Risk maps differ from other risk assessment tools and techniques in which one of the following
ways?
A. Risk maps dissect processes within the organization from input to output for the purpose of
improving them.
B. Risk maps identify, prioritize, and quantify risks in a two-dimensional pictorial that illustrates
frequency and severity on vertical and horizontal axes.
C. Risk maps have the potential to identify both negative risks and opportunity risks.
D. Risk maps are able to quickly explore a vast number of possible outcomes based on large
datasets. - ANSB
As a best practice, a risk register should be an interactive computer system. Which one of the
following individuals should be responsible for continually updating risk information?
A. Customer
B. Risk management professional
C. Risk owner
D. Chief executive officer - ANSC
A tool developed at the risk owner level that links specific activities, processes, projects, or
plans to a list of identified risks and results of risk analysis and evaluation; and that is ultimately
consolidated at the enterprise level is called a
A. Risk report.
B. Risk map.
C. Risk matrix.
D. Risk register. - ANSD
Which one of the following risk assessment tools has the potential to identify both negative risks
and opportunity risks?
A. Risk maps
B. Audits
C. Cause and effect analysis
D. Failure mode and effects analysis - ANSB
Emma is a risk management professional at a chemical engineering organization. A new
process is being designed and Emma has been told that all risks must be identified and
eliminated during the design stage. Emma is a risk management professional, but not a
chemical engineering expert. She has assembled a team of engineering experts and
stakeholders to identify the risk associated with the process by subdividing the process into
components and reviewing each component and then recommend solutions. Which one of the
following team approaches to risk identification has Emma chosen?
A. Delphi technique
, B. SWOT analysis
C. Scenario analysis
D. HAZOP approach - ANSD
Cotton Products Company manufactures cotton clothing, towels, sheets, and other cotton
products. All production takes place at one large multi-acre production facility. The risk manager
of Cotton Products Company called a meeting attended by her staff, the plant foreman, the plant
safety engineer, and the head of operations. She told the group that she wanted to analyze one
problem-the top event-a catastrophic fire at the production facility. The group discussed all the
causes of failure and factors that could contribute to the top event. The causes of the -top event-
were listed, and methods of reducing the likelihood and consequences of the event were
examined. The technique the risk manager employed is called
A. Failure mode and effects analysis (FMEA).
B. SWOT analysis.
C. Scenario analysis.
D. Fault tree analysis (FTA). - ANSD
Home Appliance Company has decided to change its production method. Previously, small
teams of workers assembled washers, dryers, and dishwashers. Under the new production
method, an assembly-line will be used, with some functions performed by robotics. Before
making the change, Home Appliance Company has created a team of experts from company
personnel to identify all of the risks inherent in the new production method and to recommend
measures to address these risks. The team will assemble in a facilitated workshop and follow
these steps:
Divide the production method into components
Review each component to identify risk
Identify causes and potential outcomes for each risk
Develop a solution for each risk.
This team approach is risk identification is called a
A. SWOT (strengths, weaknesses, opportunities, threats) analysis.
B. Delphi technique.
C. Facilitated workshop.
D. Hazard and operability (HAZOP) study. - ANSD
SE Industries has identified windstorm as a risk. The risk manager has assembled a team to
project the potential consequences of windstorm. The team includes individuals from various
functions within the organization. Which one of the following team approaches to risk
identification is SE Industries using?
A. Delphi technique
B. Scenario analysis
C. SWOT analysis
D. HAZOP - ANSB
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