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ARM 401 2024 EXAM TEST QUESTIONS AND VERIFIED CORRECT ANSWERS CORRECTGRADE A+
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ARM 401 2024 EXAM TEST QUESTIONS AND VERIFIED CORRECT ANSWERS CORRECTGRADE A+
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ARM 401 2024 EXAM TEST QUESTIONS ANDVERIFIED CORRECT ANSWERS CORRECTGRADE A+
Radio Frequency Identification (RFID) - (correct answer) A technology that uses
radio frequency to identify objects
Artificial Intelligence - (correct answer) Computer processing or output that
simulates human reasoning or knowledge
Computer Vision - (correct answer) A technology that simulates human vision
Risk registers should always do these 4 things: - (correct answer) Identifies the
organization's risks appropriately
Prioritizes risks according to their potential effects on the organization
Allows for collaboration and instant updating by risk managers and stakeholders
Tracks improvement actions to take, when they're taken, and when a follow-up or
review will occur
Risk Register - (correct answer) 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
Risk Map vs Risk Register - (correct answer) An organization would use a risk
register to identify, describe, and prioritize the risks of either a specific circumstance
(such as a process, project, or risk event) or the organization as a whole. It's essentially
a ledger to document risks and all information related to them. A risk map, on the other
hand, is developed after a risk register and incorporates information from the register. A
risk map provides a visual representation of a risk register's data to show which risks
are the highest priority for risk managers and owners.
Relationship between inherent, residual, and optimuml risk - (correct answer) if the
difference between the inherent risk and what the residual risk will be after a treatment
is applied is small, either the risk doesn't need to be treated or the treatment itself isn't
effective enough. The difference between the residual risk and optimum risk represents
how much further a risk can be reduced
What is the premise of holistic risk management? - (correct answer) The premise of
holistic risk management is that all business decisions and operations carry some risk,
so organizations should look beyond hazards to assess exposures from the other three
quadrants of risk: strategic risk, operational risk, and financial risk.
How can organizations benefi t from using the data they collect to perform predictive
modeling and manage risk? - (correct answer) Some benefits may include
empowering decision making by uncovering risks that are not yet known or predicting
potential outcomes of business decisions.
,Explain why it is helpful to include representatives from diverse groups in an
organization during team workshops to identify risks - (correct answer) It is helpful to
include representatives from diverse groups in an organization during team workshops
because discussion of the combined and cascading eff ects of risks provides valuable
information on risk level and priority. Such discussion can identify opportunity risks as
well as risks with potentially negative consequences
Describe the Delphi technique. - (correct answer) The Delphi technique uses the
opinions of a select group of experts to identify risks. Typically, these experts do not
meet but respond to a survey or inquiry. The standard Delphi technique involves
submitting two rounds of queries to the selected experts. First, each expert responds to
a question, and the combined answers, which remain anonymous, are presented to the
group. The same question is then posed again to the experts, who are instructed to
consider revising their responses based on the results that were reported to the group.
This question-and-response cycle continues for a predetermined number of rounds or
until a consensus is reached.
Discuss the advantages and disadvantages of scenario analysis in identifying risks. -
(correct answer) Scenario analysis is useful in identifying a range of potential
consequences and in prioritizing risks. An internal cross-functional team at an
organization can implement the technique to obtain a multidimensional view of the
potential consequences of a risk. However, a potential disadvantage is that the risk
identification process may be limited by the imagination and brainstorming capabilities
of the team selected. This could lead to overlooking key risks or consequences of risks.
Although cross-functional teams reduce these disadvantages, they do not eliminate
them.
Identify the steps in a hazard and operability, or HAZOP, process. - (correct answer)
a. Subdivides the project or system design into small components b. Reviews each
component to identify risks c. Identifi es the cause and potential outcome(s) for each
risk d. Develops a solution for each risk e. Ensures that solutions work and reevaluates
as necessary
Describe the SWOT approach to risk identification. - (correct answer) SWOT—an
acronym for strengths, weaknesses, opportunities, and threats—is a type of team
approach that is useful in analyzing a new project or product. The strengths and
weaknesses are internal factors to be considered. The opportunities and threats are
external factors.
Explain the ideal outcome of a SWOT analysis. - (correct answer) The SWOT
analysis should ideally conclude with a "go" or "no go" recommendation for a specifi c
project and should include discussion on whether weaknesses or threats can be
converted into strengths or opportunities.
Brianna, the risk manager at Build It Construction Co., has disseminated a forklift safety
checklist among operators. Why might this action prove only partially eff ective? -
,(correct answer) Brianna's checklist can communicate known risks to Build It's forklift
operators. For example, it can require them to examine seat belts, headrests, masts,
carriages, forks, battery connections, lights, horns, and brakes and to check for fuel
leaks. But it can't tell them whether the forklift manufacturer issued a recall or predict
that a critical part is about to fail.
How do emerging risk assessment tools and techniques, such as sensors, radio
frequency identification tags, artificial intelligence, and computer vision, complement
traditional risk identification and analysis techniques? - (correct answer) Emerging
technologies and smart devices provide real-time data used for dynamic risk identifi
cation and assessment. Although these technologies, products, and operations don't
replace more traditional risk identifi cation and analysis techniques, they do overcome
some of the shortcomings of the traditional methods. For example, they can quickly
explore a vast number of possible outcomes based on large datasets.
What is the purpose of an individual risk register? - (correct answer) Individual risk
registers can be used to identify, describe, and prioritize risks for specifi c scenarios,
projects, departments, business units, and processes. Risk management professionals
can use individual risk registers as the basis for a larger organizational risk register that
prioritizes all key risks (compiled from the individual registers).
Chemtime, Inc., an organization that manufactures chemicals, wants to develop a risk
register for a fi re scenario. Which tasks should its risk register be designed to
accomplish? - (correct answer) No matter how an organization chooses to design its
risk register, risk management professionals should ensure it accomplishes these tasks:
• Identifi es the organization's risks appropriately • Prioritizes risks according to their
potential eff ects on the organization • Allows for collaborative use and instant updating
by risk managers and stakeholders • Tracks improvement actions to take, when they're
taken, and when a follow-up or review will occur
What is the description and purpose of a basic risk map? - (correct answer) A basic
risk map translates the risks identifi ed in the risk register into a risk diagram, which
often takes the form of a heat map. This diagram can identify the likelihood and
consequences of risks and their relationship to the organization's risk appetite
Aleski is the risk manager for a jeweler who wants to open a new store in the middle of
a crowded metropolitan area. After assembling a team to identify associated key risks
and plot them on a risk map, Aleski fi nds that two risks, employee theft and customer
theft, have identical levels of likelihood and fi nancial consequences. How should Aleski
determine which risk to treat fi rst? - (correct answer) To determine which of the
jeweler's risks to treat fi rst, Aleski should initially determine how he would treat each
risk. Next, he should compare the inherent risk for employee theft by the residual risk
that will remain after a treatment is applied to it. Then, he should compare the inherent
risk for customer theft by the residual risk that will remain after a treatment is applied to
it. Whichever treatment will result in the lower residual risk should be the fi rst one
implemented.
, What are the four quadrants of risk? - (correct answer) The four quadrants of risk
are hazard, operational, financial, and strategic risk.
Antonia, a risk manager for Pocomo Enterprises, is conducting a detailed risk identifi
cation for the organization. What are some common risk identification team approaches
she might use as part of her work? - (correct answer) Antonia can employ various
common team approaches to risk identification, including facilitated workshops, the
Delphi technique, scenario analysis, HAZOP (hazard and operability study), and SWOT
(strengths, weaknesses, opportunities, and threats).
What's the difference between collaboration, cooperation, and coordination? - (correct
answer) Collaboration is working together to achieve a shared objective. Cooperation
is working together to achieve individual objectives instead of a shared objective. And
coordination involves improving effi ciency and reducing redundancy by some
combination of arranging, assigning, organizing, or scheduling activities.
ABC Organization wants to foster collaboration with its internal and external
stakeholders. What's the fi rst step it should take? - (correct answer) The first step
ABC Organization should take in fostering collaboration with its internal and external
stakeholders is gaining a broad perspective of the organization and stakeholders'
interactions with it
Why should a risk professional have a basic understanding of a topic before consulting
with a subject-matter expert? - (correct answer) By having a basic understanding of
a topic before speaking with a subject-matter expert, a risk professional will be able to
ask follow-up questions and translate the concerns identifi ed by the expert into more
basic language to be shared with internal stakeholders.
Why should a risk professional who has gained answers from a subject-matter expert
continue to communicate and collaborate with that expert? - (correct answer) After
having questions answered by the subject-matter expert, the risk professional will need
to lay out all the potential risks, identify those that are most likely to aff ect the
organization, assess their potential severity, and make treatment recommendations.
Continued communication with subjectmatter experts will ensure ongoing cooperation in
eff ectively treating the identifi ed risks.
What is the difference between qualitative and quantitative risk assessments? -
(correct answer) Qualitative assessment measures a risk by the significance of
consequences; it may use such ratings as high, medium, and low. Quantitative analysis
assigns specific values to consequences and their probabilities to reach a numeric
indication of the level of risk.
How can an organization estimate risk probabilities in the absence of historical data? -
(correct answer) In the absence of historical data, an organization may base
probability estimations on predictions or expert opinions. Several structured processes
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