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ARM 401: Multiple Choice Questions With Accurate Solutions
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ARM 401: Multiple Choice Questions With Accurate Solutions
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ARM 401: Multiple Choice Questions With AccurateSolutions
A risk management professional should ensure that an organizational risk
register has which one of the following characteristics? Right Ans -
Provides interactive use for risk owners
East Side Fitness has decided to merge with a yoga studio with two locations
near-by. The owners believe that with this complimentary business, they will
be able to increase the membership fees for current members and also grow
the overall membership. Which one of the following quadrants of risk will be
most influenced by this decision? Right Ans - Strategic risk
In order to achieve collaboration, group leaders must Right Ans - Remain
focused on preventing stakeholders from straying from the common goal
Risk management professionals can use risk mapping to identify inherent risk
and residual (current) level of risk. Inherent risk is important because the
difference between inherent and residual risk provides a measure of Right
Ans - The effectiveness of the current risk treatment
The use of risk quadrants to identify and categorize risk provides a
framework for Right Ans - Holistic risk identification
Erin is a project manager at Shelton Manufacturing. She is responsible for a
major project that will require the collaboration of many different groups.
Erin needs to motivate everyone from the sales force and support team, to the
suppliers, production lines, and logistics teams to achieve the goal by July 1st.
Which one of the following is key in order for Erin to achieve this
collaboration? Right Ans - Putting the desired result at the forefront and
making sure that everyone knows what group success looks like.
Which one of the following is a technique used to provide a visual perspective
of an organization's risks and to prioritize those risks? Right Ans - Risk
mapping
After meeting with an external expert on climate change, an organization's
risk professional will need to do all of the following, EXCEPT: Right Ans -
,Communicate all of the potential risks cited by the external expert to the
board of directors
Which one of the following risk assessment tools has the potential to identify
both negative risks and opportunity risks? Right Ans - Audits
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
Right Ans - Scenario Analysis
Risk maps differ from other risk assessment tools and techniques in which
one of the following ways? Right Ans - Risk maps identify, prioritize, and
quantify risks in a two-dimensional pictorial that illustrates frequency and
severity on vertical and horizontal axes.
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? Right Ans - Scenario analysis
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 Right Ans - SWOT analysis
, After a month in which three employees were seriously injured at company
paper mills, Ashley, the risk manager of Bright White Paper Company, wanted
some answers about the causes of employee injuries. Ashley independently
contracted the plant manager and foreman at each of the company's plants.
She asked each person to complete a confidential questionnaire regarding
safety procedures. After receiving the responses to the questionnaire, Ashley
summarized the result and asked the same questions again instructing each
person to consider revising their responses based on the initial questionnaire
results. The analysis revealed that new workers were not being properly
trained and that a lax attitude toward safety was present at the majority of the
plants. The team approach to risk identification Ashely employed is called
Right Ans - The Delphi technique
Which one of the following statements is true regarding the use of risk
registers with scenario models? Right Ans - A risk register should record
the likelihood of a scenario along with the consequences of associated risks.
The risk management department at Computer Hardware Company uses risk
maps to graph and analyze the risks faced by the company. One area of special
concern to the risk management team is the difference between residual risk
and optimum risk. This difference represents Right Ans - The risk
treatment opportunity to further reduce risk
James is the risk manager for a large manufacturing organization with six
locations. Each location has a plant manager who is responsible for the
operation of that location. James feels that the plant managers are in the best
position to identify and measure risk at their locations. He wants them to own
the risk. However, he is looking for a tool that will allow him to prioritize risk
according to the potential effect on the organization. James wants an
interactive tool that will adequately identify the organization's risks, and
allow them to be measured based on the likelihood and the level of risk to the
organization. Which one of the following is the most appropriate tool for
James? Right Ans - Organizational risk register
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
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