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ARM 401 Exam – Questions With Well Detailed Solutions (Verified)
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ARM 401 Exam – Questions With Well Detailed Solutions (Verified)
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ARM 401 Exam – Questions With Well DetailedSolutions (Verified)
Which one of the following team approaches to risk identification is primarily
used to design complex, scientific systems?
A. Delphi technique
B. SWOT
C. Scenario analysis
D. HAZOP Right Ans - D
Which one of the following occurs when individuals, departments, or teams
from different areas work together to accomplish a shared organizational
goal?
A. Collaboration
B. Coordination
C. Cooperation
D. Communication Right Ans - A
All systems have four features. Which one of the following is one of those
features?
A. Cargo
B. Energy
C. Environment
D. Elements Right Ans - C
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 Right Ans - B
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 Right Ans - C
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. Right Ans - D
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 Right Ans - B
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 Right Ans - D
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. Right Ans - B
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). Right Ans - D
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. Right Ans - D
, 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 Right Ans - B
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
A. The risk that cannot be altered and is retained by the firm.
B. The risk treatment opportunity to further reduce risk.
C. The risk that is handled, by default, through avoidance.
D. The potential risk that the organization does not currently face, but could
face if conditions change. Right Ans - B
Which one of the following is a technique used to provide a visual perspective
of an organization's risks and to prioritize those risks?
A. Risk mapping
B. Risk quadrants
C. Risk register
D. SWOT analysis Right Ans - A
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 likelihood and the level of risk to the
organization. Which one of the following is the most appropriate tool for
James?
A. SWOT analysis
B. Risk map
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