ARM 401 Exam Questions with CORRECT ANSWER s
Question : holistic approach to managing risk
CORRECT ANSWER : -broader in scope, managing all
areas of the business, not just hazard risks -encompasses the analysis and predictability of business processes and organizational decisions -mandates the collaboration of internal and external stakeholders to identify, assess, and treat risks -involves looking at what might be gained from decisions or actions -can uncover inconsistencies in how a company managers loss retention -can help orgs better absorb losses
Question : strategic risk
CORRECT ANSWER : -uncertainties associated with the
organization's long-term goals and management decisions -may carry a greater risk dynamic, positive or negative, that the other categories
Question : operational risk
CORRECT ANSWER : uncertainties associated with the
organization's procedures, systems, and policies
Question : financial risk
CORRECT ANSWER : uncertainties associated with the
organization's financial activities
Question : today's conception of risk
CORRECT ANSWER : incorporates the idea that taking
risks is fundamentally necessary for growth
Question : predictive modeling
CORRECT ANSWER : can empower decision making by
uncovering previously imperceptible risk factors
Question : Internet of Things
CORRECT ANSWER : network of devices that sense their
environment, process data, and share it instantly
Question : cloud computing
CORRECT ANSWER : enables orgs to store and share data
through wireless internet and networking services
Question : blockchain technology
CORRECT ANSWER : -facilitates secure transactions
without the need for a third party -protects against cyber threats -eliminates the need to verify the accuracy of risk management data -lets risk managers spend more time on forward-looking functions
Question : what fuels the future of holistic risk management?
CORRECT ANSWER : the capture, storage, and analysis of
data
Question : covariance
CORRECT ANSWER : -the measure of how two random
risk variables will change in relation to each other -calculates correlation between the variables
Question : variance
CORRECT ANSWER : -the spread of the data set, or how
far apart the numbers are in relation to the mean
Question : team approaches to risk identification
CORRECT ANSWER : 1. facilitated workshops 2. Delphi
technique 3. scenario analysis 4. HAZOP 5. SWOT
Question : why is it important to take a team-oriented
approach to identifying risks?
CORRECT ANSWER : -provide diverse perspectives on
risks -can reveal how risks are connected across an org, reducing the likelihood for risks to be overlooked