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ARM 54 Assignment 1- Test Questions and Answers
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ARM 54 Assignment 1- Test Questions and Answers
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ARM 54 Assignment 1- Test Questions and AnswersLaw of Large Numbers Correct Ans-A mathematical principle stating that as the number of
similar but independent exposure units increases, the relative accuracy of predictions about
future outcomes (losses) also increases.
Correlation Correct Ans-a relationship between variables
Pure Risk Correct Ans-A chance of loss or no loss, but no chance of gain.
speculative risk Correct Ans-A chance of loss, no loss, or gain.
Credit Risk Correct Ans-The risk that customers or other creditors will fail to make
promised payments as they come due
Subjective Risk Correct Ans-The perceived amount of risk based on an individual's or
organization's opinion.
Objective Risk Correct Ans-The measurable variation in uncertain outcomes based on facts
and data.
diversifiable risk Correct Ans-A risk that affects only some individuals, businesses, or small
groups.
, ARM 54 Assignment 1- Test Questions and Answers
nondiversifiable risk Correct Ans-A risk that affects a large segment of society at the same
time.
market risk Correct Ans-Uncertainty about an investment's future value because of
potential changes in the market for that type of investment
Liquidity Risk Correct Ans-The risk that an asset cannot be sold on short notice without
incurring a loss
enterprise risk management Correct Ans-An approach to managing all of an organization's
key business risks and opportunities with the intent of maximizing shareholder value.
risk profile Correct Ans-A set of characteristics common to all risks in a portfolio
Smart Product Correct Ans-an innovative item that uses sensors, wireless sensor networks,
and data collection, transmission, and analysis to further enable the item to be faster, more
useful, or otherwise improved.
Internet of Things (IoT) Correct Ans-A network of objects that transmit data to computers
Cloud Computing Correct Ans-information, technology, and storage services contractually
provided from remote locations, through the internet or another network, without a direct
server connection.
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