ARM 402 Exam Practice Exam 2023 With Correct Answers
4 views 0 purchase
Course
ARM
Institution
ARM
ARM 402 Exam Practice Exam 2023 With Correct Answers
Telematics devices allow organizations to accurately identify patterns of risk and predict risk for which one of the following types of loss exposures?
A. Automobile
B. Property
C. Workers compensation
D. Business income
A
Which one of t...
arm 402 exam practice exam 2023 with correct answe
Written for
ARM
All documents for this subject (172)
Seller
Follow
LectDan
Reviews received
Content preview
ARM 402 Exam Practice Exam 2023 With Correct
Answers
Telematics devices allow organizations to accurately identify patterns of risk and
predict risk for which one of the following types of loss exposures?
A. Automobile
B. Property
C. Workers compensation
D. Business income
A
Which one of the following is a major benefit that smart insurance contracts can
provide to insurance customers?
A. Smart contracts can render a risk completely preventable.
B. Smart contracts can provide broader coverage at a lower cost.
C. Smart contracts can dramatically increase the speed of loss payments.
D. Smart contracts can significantly increase the speed of premium payments.
C
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
A. Duplication.
B. Separation.
C. Loss reduction.
D. Diversification.
A
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?
A. Olivia should refuse to take questions during her meeting, and request that
any questions be forwarded to her in writing after the meeting.
B. Olivia should start the meeting by stating that she does not expect everyone
like the new procedure, but they must accept it.
C. Olivia should start the meeting by asking participants to state their concerns
or feeling about the procedure.
D. Olivia should hold a separate meeting for those individuals who she suspects
have a hidden agenda.
C
Which one of the following is a common problem with meetings that leaders
should try to avoid?
A. Trying to stick to an agenda and avoid interruptions
B. Committing to an end time, as well as a start time
C. Having the wrong people attend
D. Stating the objective in writing before the meeting
,C
Which one of the following statements about correlation and covariance is true?
A. Covariance is a scaled version of correlation and ranges from -1 to +1.
B. The correlation between variables ranges from 0 to +1.
C. Covariance measures the extent to which variables move together or
independently.
D. Correlation measures causality.
C
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?
A. Bow-tie diagram
B. Feedback loop
C. Dashboard reporting
D. SWOT analysis
B
A risk control technique that reduces the frequency of a particular loss is
A. Loss prevention.
B. Loss reduction.
C. Diversification.
D. Duplication.
A
Ivanhoe Corporation purchases stock in a bank and in a pharmaceutical
manufacturer. Because these are unrelated industries, Ivanhoe hope that any
losses in one stock will be more than offset by profits in another. Ivanhoe is
using which one of the following risk management techniques?
A. Risk transfer
B. Duplication
C. Diversification
D. Separation
C
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?
A. Dashboard reporting
B. Feedback loop
C. Scorecard
D. Bow-tie diagram
B
Ed is investment manager of the Nellor Foundation, a charitable trust. Recently,
Ed met with the president of the Foundation. Up until now, assets have been
,invested in financial assets. Ed told the president that after performing a
simulation, he would like to add a high-yielding, higher risk real estate investment
to the portfolio. When the president asked if it would be too risky, Ed replied, "It
will actually increase expected returns while reducing risk." The purported
reduction in risk occurs because
A. The real estate investment will not be large enough to significantly impact on
the portfolio.
B. Rental income generated by the real estate investment is not taxable.
C. Taxes on real estate investments may be deferred.
D. The real estate investment returns are negatively correlated with the other
assets.
D
Which one of the following risk control techniques is generally used to reduce the
frequency of a particular loss?
A. Separation
B. Loss reduction
C. Avoidance
D. Loss prevention
D
Which one of the following statements regarding correlation analysis is true?
A. Because it incorporates so much data, a risk professional can rely on
correlation analysis only when making a major decision.
B. Abnormal observations and inaccurate data may skew correlation analysis.
C. The range of correlation coefficients is from 0 to +1.
D. Correlation analysis can indicate causality between variables.
B
When organizations invest their assets among a mix of stocks and bonds from
companies in different industry sectors they are using the risk management
technique of
A. Diversification.
B. Duplication.
C. Risk transfer.
D. Separation.
A
Diversification is a risk control technique that
A. Spreads loss exposures over numerous projects, products, markets, or
regions.
B. Views the cause of accidents to be a result of business concentration and
vertical integration.
C. Produces a copy or backup and keeps it in reserve.
D. Divides an asset or operation into two or more separate units.
A
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?
A. To provide the team with all of the information it needs to know about the risk
, within a very brief period of time
B. To identify the risk and list its possible causes and possible consequences on
either side
C. To depict the likeliness that the risk will occur
D. To consistently monitor risk exposures and the controls in place
B
A risk control technique that reduces the severity of a particular loss is
A. Loss reduction.
B. Loss prevention.
C. Duplication.
D. Diversification.
A
Advancements in machine learning and artificial intelligence (AI) have helped
insurers do all of the following, EXCEPT:
A. Price insurance policies more precisely
B. Completely prevent customers' risk
C. Customize policies to more closely align with customers' actual risk
D. Deliver policy information and payment options to a mobile device
B
A local shopping center reduced its net income loss after a fire by incurring
additional expenses to shorten the time it takes to repair the damage and reopen
the shopping center. Bob, the owner of the center, hired a contractor to work
around the clock until repairs were completed. This reduced Bob's net income
loss because he was able to repair the shops sooner. Bob's action is an example
of which one of the following risk management techniques?
A. Loss prevention
B. Avoidance
C. Diversification
D. Loss reduction
D
Conor 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 Conor to use his body language to convey
confidence in his message and interest in his staff?
A. Conor should walk around the room standing over different individuals as he
speaks.
B. Conor should sit up and lean slightly toward the audience.
C. Conor should keep his hands folded on the table to avoid distracting motions.
D. Conor should sit at the end of the table leaning back in his chair.
B
Jepson Manufacturing Company is a U.S.-based company with operations in
Mexico, Canada, Brazil, and the Netherlands. Jepson purchases a nonadmitted
policy in the U.S. and policies from admitted insurers in each of the countries in
which it operates. This collection of admitted and nonadmitted policies used by
multinational businesses is called
A. A facultative insurance program.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller LectDan. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $16.99. You're not tied to anything after your purchase.
