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ARM 402: Multiple Choice Section 1 – Questions& Correct Answers
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ARM 402: Multiple Choice Section 1 – Questions& Correct Answers
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ARM 402: Multiple Choice Section 1 – Questions&Correct Answers
An organization that operates warehouses in two locations is using the risk
control technique of Right Ans - Separation
Which one of the following is a risk control technique that reduces the
frequency of a particular loss? Right Ans - Loss prevention
Once a holistic risk management program is created and put into effect, which
one of the following methods can be used to allow constant and consistent
monitoring of the process? Right Ans - Feedback loop
Olivia is planning a meeting to explain a new cyber security procedure. She
expects that the meeting will be impeded by hidden agendas. Which one of the
following is the best way for Olivia to deal with potential hidden agendas?
Right Ans - Oliva should start the meeting by asking participants to state their
concerns or feelings about the procedure.
The risk manager of a large manufacturing company has been asked by the
CFO to develop a strategy to eliminate property damage at a particular site.
Which one of the following risk control techniques can the risk manager use to
reduce the probability of loss to zero? Right Ans - Avoidance
Which one of the following statements about correlation is true? Right Ans
- If two variables are perfectly positively correlated, if one variable increases,
the other will increase in direct proportion.
Internet of Things (IoT) devices, sensors, wearables, and telematics devices
have had the greatest impact on which one of the following risk treatment
techniques? Right Ans - Risk modification
Which one of the following statements about correlation and covariance is
true? Right Ans - Covariance measures the extent to which variables move
together or independently.
Which one of the following risk control techniques is generally used to reduce
the frequency of a particular loss? Right Ans - Loss prevention
,Advancements in machine learning and artificial intelligence have helped
insurers do all of the following, EXCEPT: Right Ans - Completely prevent
customers' risk
Connor needs to deliver an important message to his staff. He has scheduled a
meeting in a conference room with his staff of 10 individuals. Which one of the
following is the best way for Connor to use his body language to convey
confidence in his message and interest in his staff? Right Ans - Connor
should sit up and lean slightly toward the audience.
A1 Architectural Design relies on its historical files and blueprints. The
partners of the firm are discussing risk control measures that can be
implemented to provide protection against property-related losses. Which
one of the following would likely offer the best protection for this exposure?
Right Ans - Duplication
Maxwell Company has just invested a large sum in new, highly-sophisticated
computer equipment and building renovations. Maxwell arranged to lease
identical equipment at another location so that it could use the equipment in
the event of a disaster at its location. Maxwell's lease of identical equipment at
another location is an example of Right Ans - Duplication
Which one the following statements regarding correlation analysis is true?
Right Ans - Abnormal observations and inaccurate data may skew correlation
analysis
Hanna is preparing her presentation for a meeting. She has a very specific
objective which has been shared with the audience. Hanna wants to include
several slides in her presentation because she has read that people tend to
learn more from presentations that are accompanied by visual aids. Hanna
should use the slides to do which one of the following? Right Ans -
Emphasize key points
Blithe Drug Manufacturing has developed a drug that cures obesity. However,
the side effects are significant and potentially fatal. Blithe decides not to
manufacture and sell the drug. This is an example of Right Ans - Avoidance
, A risk control technique that reduces the severity of a particular loss is
Right Ans - Loss reduction
Pacific Bar and Grill was having a problem with employees slipping and falling
in the kitchen and bar areas. Rather than incur the cost to replace the floors
with a new non-slip surface, the owners decided to require employees to wear
slip-resistant shoes and monitor the floors for spills on a regular schedule.
They are also keeping track of the number of employee slips and falls and the
associated costs, as well as, the expenses involved with this risk management
program. Which one of the following methods is Pacific Bar and Grill using to
measure the effectiveness of this risk management process? Right Ans -
Feedback loop
Victor is the risk manager for Jones Incorporated. He decided that a bow-tie
diagram would be the best method to convey a potential risk to the executive
team. Victor will use the bow-tie diagram to do which one of the following?
Right Ans - To identify the risk and list it possible causes and possible
consequences on either side
Telematics devices allow organizations to accurately identify patterns of risk
and predict risk for which one of the following types of loss exposures?
Right Ans - Automobile
Which one of the following statements describing following from excess
liability insurance is most accurate? Right Ans - In its purest state, a
following form excess liability policy is nothing more than an increase in
limits to the primary policy.
William is the risk manager for a manufacturing company that has decided to
expand its operations into several foreign countries. He and the executive
team are debating whether they should rely on admitted insurers for
insurance coverage in the foreign counties, or use their insurer domiciled in
the U.S. For the executive team, which on of the following is an advantage of
purchasing the insurance for their foreign operations through admitted
insurers in those countries? Right Ans - Doing business locally and
complying with local laws will help integrate the company into the local
economy and community.
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