ARM 400 EXAM QUESTIONS AND ANSWERS

Encouraging the expression of feelings as well as facts and following up with employees on the problems they report are two ways that managers and supervisors can A. Cultivate two-way communication. B. Facilitate active listening. C. Support diverse groups. D. Maintain control of the conversation. - Answer- A. Cultivate two-way communication. Before speaking with a group or individual, the speaker should think about what he or she wants the other person(s) to do as a result of the conversation. Which one of the following steps in the communication process does the speaker complete by doing this? A. Analyze your audience B. Set aside judgement C. Set a clear communication objective D. Deliver a message the recipient(s) want to hear - Answer- C. Set a clear communication objective According to the law of large numbers, as the number of exposure units insured increases, A. The size of the average loss declines. B. The relative accuracy of predictions about future losses increases. C. The probability of an underwriting loss increases. D. Fewer losses are expected to occur. - Answer- B. The relative accuracy of predictions about future losses increases. When communicating a decision up the organization's chain of command, consulting with outside experts can help a risk management professional do which one of the following? A. Define the organization's risk appetite B. Stay focused on the organization's objectives C. Enhance stakeholders' confidence in the process D. Seek feedback from stakeholders - Answer- C. Enhance stakeholders' confidence in the process Company G is a manufacturer of high profile golf equipment. The risk management professional for Company G is concerned about loss of business related to product design. Failing to respond to changing customer demand and preferences in the design of golf clubs could cost Company G significant market share. Categorized according to the quadrants of risk, this exposure to loss is classified as A. An operational risk. B. A strategic risk. C. A financial risk. D. A hazard risk. - Answer- B. A strategic risk.