A.R.M. 400 Exam Practice
A corporate board of director's chair person is elected by A. The board of directors. B. The shareholders. C. Executive management. D. Proxies.
A
A privacy impact assessment (PIA) is A. A tool used to identify and assess privacy risks. B. An example of metadata that defines key data attributes. C. A collaborative tool that facilitates workflows. D. Proprietary software used to detect malware.
A
AMRM Insurance Company sells insurance in Virginia, North Carolina, South Carolina, and Georgia. The company has compiled a policyowner data base that can be used to send text messages when hurricanes approach. The company provides early warnings, storm updates from the National Weather Service, and hurricane safety measures. The company credits the system with reduced hurricane claims. The use of the texting system is an example of A. Preventive analytics. B. Artificial intelligence. C. Sensor
A
After opening its third store, Shoehorn Shoes decided to purchase new inventory tracking software for all of its stores. Which one of the following external or internal environments does this decision relate to? A. Operations environment B. Physical environment C. Economic environment D. Product environment
A
All of the following are true regarding the composition of boards of directors, EXCEPT: A. Corporate boards are uniform in size with 13 directors. B. Boards include both inside directors and outside directors. C. Directors elect the chairman of the board. D. Outside directors serve on the compensation committee.
A
An organization evaluates key stakeholders' attitude toward risk in order to A. Understand what risks are acceptable and to develop an effective enterprise-wide risk management program. B. Understand acceptable risks and gauge its ability to attract new shareholders. C. Understand acceptable risks and gauge its ability to raise capital. D. Understand the risk appetite in order to determine what information is disseminated.
A
An organization must meet the standard of care that it owes to others in order to ensure that A. Legal obligations are satisfied. B. Post-loss goals are in place. C. Operations are efficient. D. Contracts are not breached.
A
Asking a question such as "How do you think this will work out?" can help a speaker do which one of the following? A. Request feedback and determine if the message has been understood B. Gain the support of executives and decision makers C. Build trust among a diverse group of individuals D. Deliver a message that recipients don't want to hear
A
Catastrophes such as recent earthquakes and the 2011 tsunami in Japan pointed out a need for many organizations to evaluate and manage their A. Supply-chain risk. B. Derivative risk. C. Compliance risk. D. Political risk.
A
It is necessary to assess the risk appetite of a business supplier prior to doing business because understanding the risk appetite allows the organization to A. Ascertain whether the relationship is a good fit. B. Negotiate better prices and delivery times. C. Better control its production. D. Leverage its payments to the supplier to the organization's advantage
A
Karen Williams, a retired chief financial officer of a bank, was invited to join the board of directors of ABC Property and Liability Insurance Company. She was asked to serve on the Audit Committee and the Risk Committee of the ABC board. Which of the following statements is true regarding Karen's service on the ABC board of directors? A. The entire board retains oversight responsibility over risks that are assigned to Karen's Audit Committee. B. The work of Karen's Risk Committee is limited to
A
Key risk indicators (KRIs) can be established for various levels within an organization. Which one of the following levels of an organization usually has the most detailed KRIs? A. Department level B. Board of director level C. Business-unit level D. Senior management level
A
One of the strategic objectives for Cromley Insurance Group is customer satisfaction. Which one of the following is a critical success factor (CSF) that would help refine this strategic objective? A. High customer retention B. Reduce claim activity by 4 to 6% C. Increase retention ratio by 5% D. High profitability
A
Organizations are increasingly creating chief risk officer (CRO) positions. Which one of the following statements is correct with respect to CROs? A. The CRO's rank and importance to the board of directors are equal to those of the organization's other executive officers. B. Typically, a CRO analyzes, measures, and monitors risk; compiles reports; and facilitates risk workshops without the need for staff. C. CROs' roles are relatively standardized from industry to industry; they focus primarily
A
Organizations use key risk indicators (KRIs) to plan for and respond to risk. Which one of the following statements is correct with respect to KRIs? A. A KRI can reveal an upward trend in the level of a risk that, if it continues, will exceed the designated risk threshold for that risk. B. KRIs are effective internal indicators of changes such as budget variances; however they are not effective external indicators. C. An organization's risk criteria, predefined tolerance ranges that measure vari
A
Parker International tends to communicate only the information that stakeholders need to complete their tasks and achieve goals. The management style at Parker International is A. Directive. B. Delegating. C. Responsive. D. Supportive.
A
Risk can be classified as diversifiable or nondiversifiable. Which one of the following statements is true with respect to this type of risk classification? A. Diversifiable risks tend not to be correlated so they can be managed through diversification or spread of risk. B. Systemic risks are generally diversifiable. C. Private insurance tends to concentrate on nondiversifiable risks; government insurance is often suitable for diversifiable risks. D. Inflation, unemployment and natural disasters
A
Rufus owns 1500 shares in the ARM Corporation. Recently, ARM has shouldered significant liabilities due to pollution problems. Generally, Rufus' liability as a shareholder would be limited to which one of the following? A. The value of their shares B. Treble damages C. The amount of assets they have D. The amount of insurance coverage they have
A
Samuel was recently hired as a risk management professional for Parker Property Management. He has been asked by senior management to review the organization's current insurance policies to make sure that the organization is adequately protected, and also see if there are any opportunities to save on the premiums. Samuel must do which one of the following through internal communication before he will be able to complete this task? A. Determine the organization's risk appetite B. Identify all of
A
Senior management of CAZ Company decides to cut its involvement with the local youth association and no longer allow its employees to work with kids during business hours. Additionally, they will no longer fund the Youth House. Which one of the following best describes how this action may affect its risk management profile? A. Corporation may increase its external social risk by negating any goodwill the community has for the company. B. Corporation may increase its financial exposure by not hav
A
Shelton Manufacturing recently signed a contract with a new customer which will require them to increase production by 20 percent. The organization has decided to form a risk center to identify and assess the risks involved with this new contract, and manage them efficiently. Which one of the following individuals should be the risk owner? A. Production manager B. Sales manager C. Senior manager D. New customer
A
The emerging technologies applied to risk assessment and control link the physical domain to the virtual domain. Together, these domains linked by the emerging technologies create a A. Connected ecosystem. B. Risk management information system. C. Smart system. D. Risk management matrix.
A
Which of the following statements best describes the risk governance role and responsibility of a corporate board of directors? A. To set the organization's risk appetite and to stay informed of the most significant risks to the organization and management's responses. B. To convert strategy into operational objectives and to identify and assess the impact of risks on the achievement of the objectives. C. To establish risk management policies, to define risk management roles and responsibilities
A
Which one of the following measures the progress an organization has made toward attaining its goals within a specific amount of time? A. Key performance indicator B. Risk tolerance level C. Critical success factor D. Key risk indicator
A
Which one of the following provides a measure of the maximum potential damage associated with an occurrence? A. Exposure B. Duration C. Underwriting risk D. Maximum probable loss
A
Which one of the following statements is correct with respect to the role of a board of directors in risk oversight? A. Increasing pressure on boards of directors to provide greater enterprise-wide risk oversight comes from sources such as investors, rating agencies, and regulators. B. A 2012 survey of executives revealed that practically all boards have formally assigned risk oversight responsibility to a board committee. C. A board's risk management strategy and broad objectives typically have
A
Which one of the following statements is true regarding separation of ownership and control in corporations? A. The incentive for managers and non-management board members to pursue their own interests at the expense of shareholders gives rise to agency costs. B. Corporate governance is not concerned with the separation of ownership and control. C. Shareholders retain decision-making authority while managers control business operations. D. Limited liability of shareholders impedes the separation
A
Which one of the following statements is true regarding the basic measures that apply to risk management? A. Consequences measure the degree to which an occurrence could positively or negatively affect an organization. B. Hedging is a risk management strategy that can reduce the risk of correlation. C. Risk increases as volatility decreases. D. Longer time horizons are generally less risky that shorter ones.
A
Which one of the following statements is true regarding the business process management (BPM) life cycle model? A. The model is driven by the collaboration of human and technological input. B. The model is designed to review one business process at a time. C. The model is primarily used by organizations in the manufacturing sector. D. The model is ineffective unless all five steps are completed on a continuous basis.
A
Which one of the following terms refers to information used as a basis for measuring the significance of a risk? A. Risk criteria B. Risk tolerance C. Risk appetite D. Risk threshold
A
A municipal water plant installed water flow sensors and water pressure sensors on the water pipes leaving the plant. The sensors make sure water is flowing properly and that there are no leaks or clogs which could produce a loss. These types of sensors are A. Thermal sensors. B. Mechanical sensors. C. Biochemical sensors. D. Radiant sensors.
B
Autonomous Vehicle Applications (AVA) is a start-up company that develops safety technologies that can be sold to companies that are producing autonomous vehicles. One technology AVA is developing allows an autonomous vehicle to detect, extract, and analyze images; and then to respond to the images. For example, the technology would detect a presence in a crosswalk, extract the image, and a computer would analyze the image. When the image was determined to be a human being, the vehicle would slo
B
Corporate governance is evolving towards the separation of oversight and control for boards of directors. This separation may be accomplished by A. Requiring a company executive to chair each board committee. B. Requiring the majority of the directors to be outside directors. C. Requiring the audit committee to be comprised of inside directors. D. Using company-appointed board members rather than shareholder-elected board members.
B
Last year, three Metro City firemen died responding to a fire at a chemical plant, when they were overcome by toxic fumes. In response, Metro City is purchasing advanced first responder gear. It includes special flame retardant suits with chemical and explosive fume sensors, air quality sensors, and heat sensors. Responders will also wear special watches that will track a responder's pulse, respiration, and blood pressure; and helmets that include video cameras. All of these sensors will feed da
B
North American Furnishings is using business process management to help it identify risks that threaten its processes. Which one of the following risks would be considered an internal risk? A. The loss of available materials due to tornadoes B. The loss of skilled craftspeople due to retirement C. The drop in demand due to rising interest rates D. The rise in the cost of materials due to new forestry regulations
B
One of the categories of agency costs associated with managing the relationship between management and shareholders is A. Implementation costs. B. Monitoring costs. C. Acquisition costs. D. Commission costs.
B
Organizations use key risk indicators (KRIs) to plan for and respond to A. Failure. B. Risk. C. Questions. D. Emergencies.
B
The fundamental purpose of a risk management framework is to A. Maximize profits for all stakeholders. B. Integrate risk management throughout the organization. C. Define and eliminate potential losses. D. Reduce the cost of risk.
B
The traditional definition of risk management reflects the traditional concept of risk as A. Both positive and negative. B. Negative. C. Uncontrollable. D. Strategic.
B
Which of the following risk management program goals is an essential goal for all public entities? A. Earning stability B. Continuity of operations C. Growth D. Survival
B
Which one of the following best explains how a risk-managed organization views a proposed new product line? A. It determines the rewards of a new alternative and may underemphasize the impacts, variances and negative effects. B. It weighs the risk-reward relationship while realistically evaluating potential outcomes and consequences. C. It attempts to join with another organization for a joint venture taking little of the actual risk on itself. D. It seeks methods of transferring the potential r
B
Which one of the following is the term used for a person—usually a manager—who advocates for and supports a specific aspect of the risk management process in an organization? A. Risk manager B. Risk champion C. Chief risk officer (CRO) D. Internal auditor
B
Which one of the following should be part of an organization's standard operating procedures (SOPs) concerning external stakeholder communications? A. Instructions to always use written communication, rather than verbal or nonverbal communication B. Instructions regarding what types of information can and cannot be released C. Instructions requiring the use of formal, rather than informal communication D. Instructions to avoid the use of social media
B
Which one of the following statements is correct regarding risk owners? A. Generally, external stakeholders should not be considered to be risk owners. B. Generally, the stakeholder who is most affected by or creates a risk should be its risk owner. C. The risk owner is usually a member of the senior management team. D. The risk owner should be given full authority to make decisions without management involvement.
B
Which one of the following statements is true regarding the roles of a risk champion and a chief risk officer? A. A chief risk officer usually has less influence on corporate decision making than a risk champion. B. A chief risk officer is more likely to have a dedicated staff to assist with the responsibilities of his or her job. C. A risk champion is a member of the board of directors who has been selected to concentrate his or her efforts on assessing the risks faced by an organization. D. A
B
Which one of the following statements regarding corporate governance and risk oversight is true? A. Nonfinancial organizations are subject to greater regulatory pressure for transparency and astute risk management than financial organizations. B. Some board of directors delegate risk oversight tasks to board committees, such as the audit committee, risk committee, and compensation committee. C. Board oversight should be limited to past history and current conditions, and should avoid considerati
B
Which one of the following statements regarding the structure and role of a board of directors is true? A. The board of directors must be comprised of ten directors, with an equal number of inside and outside directors. B. Members of the board elect a director to be chairman of the board. C. The board is responsible for the day-to-day decisions at a corporation. D. Members of the board are appointed by the president of the company.
B
A speaker imparts information in verbal communications by A. Using appropriate facial expressions and gestures while other parties express their opinions and concerns. B. Expressing facts and emotions quickly, inviting written questions for discussion at a future session. C. Having good listening skills and expressing facts and emotions through words and sometimes visual displays. D. Listening and verbally responding with anecdotes of prior meetings, leveraging humor as opposed to facts for disc
C
A vehicle manufacturer found that the exhaust system in certain models was not working properly. Some exhaust gases were releasing into the vehicle body. Rather than recalling the vehicles, they were shipped to South American markets. The manufacturer A. Is socially responsible because it shipped the vehicles out of the country thereby avoiding any US casualties. B. Is socially responsible because it does not force any individual to buy the vehicle. C. Has ignored its social responsibility as we
C
According to the law of large numbers, as the number of exposure units insured increases, A. Fewer losses are expected to occur. B. The size of the average loss declines. C. The relative accuracy of predictions about future losses increases. D. The probability of an underwriting loss increases.
C
An organization has established a key performance indicator to "reduce employee injuries by 6%." Which one of the following would indicate a low risk tolerance for this KPI? A. Reduce employee injuries by 2% B. Reduce employee injuries by 4% C. Reduce employee injuries by 5 to 6% D. Employee injury rate remains unchanged
C
BD Company has made widgets for over 79 years using the same production techniques for fear of the huge costs from potential consumer lawsuits if production is changed and product quality suffers. With respect to its risk attitude, this organization would be classified as A. Risk seeking. B. Risk naïve. C. Risk avoiding. D. Risk optimizing.
C
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. Deliver a message the recipient(s) want to hear B. Set aside judgement C. Set a clear communication objective D. Analyze your audience
C
Carla, the risk manager, was asked by senior management to deliver a presentation on cyber risk at an all employees meeting. Even though she was only allotted 30 minutes for her presentation, Carla felt that cyber risk was a very real risk for the corporation and she wanted employees to leave with some fear of it. She wanted to provide employees with as much technical information as possible, and familiarize them with all of the important jargon. Less than 20 minutes into her presentation, Carla
C
Clear-Rite Company specializes in the clean-up of hazardous chemical spills. Workers performing clean-up operations must use safety suits to prevent exposure to the chemicals. The suits include pulse and respiration monitors, body temperature sensors, and chemical sensors. The monitors and sensors report data to a mobile operations center which is deployed to each clean-up site. The pulse and respiration monitors and the sensors that are part of the protective gear are called A. Magnetometers. B
C
Corporate governance is defined as A. The reporting chain of command within an organization. B. A diagram of reporting relationships and levels of authority within an organization. C. The mechanisms and procedures that determine how corporations are run. D. A body of law that specifies how corporations are legally formed and chartered.
C
In addition to metal detectors, many airports have installed a second type of scanning technology for checked baggage and cargo. The checked bags and cargo pass through a portal with scanners programmed to detect and test for explosive trace fumes. These scanners, which detect explosives based on air samples, are an example of what type of sensor used for risk assessment and control? A. Radiant sensors. B. Thermal sensors. C. Biochemical sensors. D. Mechanical sensors.
C
Key risk indicators (KRIs) help organizations identify issues that can lead to losses. Effective KRIs are based on a company's A. Organizational structure. B. Product or industry. C. Strategic objectives. D. Sales volume.
C
Many auto manufacturers have automated a portion of their assembly lines by introducing a smart product. The smart product performs repetitive tasks, such as making the same weld on each vehicle frame as it passes the smart product. These smart products, which can be fixed or mobile, reduce repetitive motion injuries that humans might suffer. They can also be used to perform dangerous tasks and in heavy-lifting jobs. These smart products are called A. Wearables. B. Automated sensors. C. Robots.
C
Max is a new investor and the only stocks he owns are his 1,500 shares of Large Corporation. Large operates in a volatile high-tech sector. Max could readily trim his risk of owning shares by A. Concentrating his investments in one sector. B. Diversifying his insurance coverage. C. Diversifying his investment across many corporations. D. Concentrating his investments in one company.
C
North American Furnishings has been in business for 18 years. The organization's primary objectives are profitability and bottom-line results. It always sets aggressive goals. North American Furnishings values its customer bases. Which one of the following types of corporate culture exists at North American Furnishings? A. Hierarchy B. Clan C. Market D. Adhocracy
C
One corporate governance issue is accountability of directors. One method to increase accountability of directors is to A. Include more inside directors. B. Decrease the independence of audit and compensation committees. C. Conduct regular meetings of outside directors without management being present. D. Ensure that the chief executive officer serves as board chairman.
C
Organizations use key risk indicators (KRIs) to plan for and respond to risk. Which one of the following statements is correct with respect to KRIs? A. To best manage risk, an organization should have as many KRIs as possible. B. To be effective, KRIs should be detailed and specific. C. KRIs are based on quantifiable information and support management decisions. D. KRIs are usually only established for the executive level within an organization.
C
Risk management professionals must collaborate with data analysts during which two steps of the risk management process? A. Treat risks and monitor risk treatments B. Scan the environment and analyze risks C. Analyze risks and monitor risk treatments D. Identify risks and treat risks
C
Some best practices models call for the formation of a risk committee with a risk management focus at the organization's executive management level. Which one of the following statements best describes one of the responsibilities of an executive-level risk committee? A. To monitor the organization's compliance with established risk limits and how noncompliance is addressed B. To oversee exposures of the organization's critical risks and advise the board on risk strategy. C. To approve the organi
C
Successful organizations have goals and objectives. A financial or nonfinancial measurement that defines how successfully an organization is progressing toward its long-term goals is referred to as A. An objective gauge (OG). B. A critical success factor (CSF). C. A key performance indicator (KPI). D. An operating standard (OS).
C
The board of directors must use a thorough understanding of the organization's overall risk philosophy to determine the amount of risk the organization is willing to seek or accept in the pursuit of long-term objectives. This amount of risk is called the organization's A. Probable maximum loss. B. Retention level. C. Risk appetite. D. Maximum possible loss.
C
The business process management (BPM) life cycle incorporates five steps. Which one of the following best describes the first step in the BPM process? A. Critical processes that support achievement of the organization's goals are selected for analysis. B. Processes are modeled to identify the organization's response to what-if scenarios. C. Processes are designed or redesigned by considering workflows and affected personnel. D. Processes are tracked so that statistics on their performance can be
C
The fees paid to external auditors to verify the corporation's financial statements are an example of A. A bonding cost. B. A fiduciary cost. C. A monitoring cost. D. An incentive alignment cost.
C
The main advantage of a formal internal communication system is that A. Employees do not have direct access to each other. B. Formal internal communications takes time which may resolve issues. C. Individuals know to whom to report. D. It is easily accessed.
C
Which one of the following data capture tools has led to an explosion of risk management innovation by allowing smart products to transmit data to each other and to central hubs? A. Blockchain B. Cloud computing C. Internet of Things D. Artificial intelligence
C
Which one of the following is a main characteristic of effective key risk indicators (KRIs)? A. They define the boundaries of risk tolerance. B. They are lagging in nature. C. They are based on quantifiable information. D. They measure progress toward achieving objectives.
C
Which one of the following is one of the five steps of the risk management process? A. Align and integrate B. Establish accountability C. Scan environment D. Allocate resources
C
Which one of the following risk management objectives is critical for a manufacturer seeking new capital from investors, stockholders, and creditors? A. Anticipate and recognize emerging risks B. Social responsibility C. Reduce the deterrent effects of hazard risks D. Eliminate downside risk
C
Which one of the following statements about the use of drones is true? A. The use of drones is limited to military applications. B. Space and weight limitations prevent drones from being equipped with sensors and cameras. C. Drones may be equipped with cameras that relay data in real-time. D. The reliance on humans to operate drones severely limits their application for commercial uses.
C
Which one of the following statements is correct regarding an organization's code of ethics? A. The code of ethics should provide an organization with a set of parameters within which it should operate, with little room for interpretation. B. The code of ethics should provide a list of dos and don'ts that employees can use as a framework in making day-to-day decisions. C. The code of ethics should include principles and concepts that are dynamic enough to remain relevant in a rapidly changing bu
C
A risk management professional is identifying the organization's key stakeholders as part of the enterprise risk management program. Which one of the following would be considered an internal stakeholder? A. Unions B. Suppliers C. General public D. Stockholders
D
An organization's goals and objectives are met by establishing and attaining measurable standards for the many activities it pursues. Which one of the following statements is correct with respect to those standards? A. A key performance indicator (KPI) answers the question, "What will make our organization a success?" B. Generally, an organization's risk tolerance has little impact on its critical success factors (CSFs) and key performance indicators (KPIs). C. Organizations with key performance
D
Carbon Manufacturing Company just hired a new chief risk officer (CRO) and one of his first tasks was to recommend updated key risk indicators (KRIs) to the chief executive officer (CEO). The CEO was especially interested in KRIs measuring the company's profitability. One area of measurement that the new CRO might want to use is A. Personnel changes. B. Customer invoices. C. Customer orders. D. Aged accounts receivable.
D
Data Entry Company (DEC) offers customers data entry services. A customer can hire DEC to enter survey data to be analyzed. Many DEC employees spend long hours entering data on a computer. DEC has experienced neck strain and wrist pain complaints from their employees, increasing the company's workers compensation costs. DEC investigated the complaints of its data-entry employees. DEC adopted curved keyboards for data entry, wrist-rests for those entering data, and uniform chair heights and displ
D
During the past year, International Toys has undertaken four capital projects. The company has renovated and refurbished one of its aging warehouse buildings. It has purchased the most recent version of its current order processing computer software. It has added two trucks to its fleet of delivery vehicles. Lastly, it has purchased a new production machine that will allow it to launch a new product line. Which one of the following company projects is the most speculative risk? A. The two new tr
D
For an organization, a key performance indicator (KPI) measures the performance of a specific activity at a predetermined level or amount. Which one of the following is an example of a KPI based on a ratio? A. Customer-focused website B. High employee morale C. Safe transport of customer goods D. Inventory turnover
D
Green Corporation suffered severe losses due to tornados at its northern facility. The Board of Directors issued a statement that the current costs outweighed any sustainable profits in the near term. The risk manager can best assist the Board in its long term decision making by A. Following the directives of the board of directors preserving his/her position with the company. B. Offering a white paper on the merits of shutting down the facility, laying off the staff and shifting the work to oth
D
In an effort to reduce expenses, increase profitability, and reduce human errors; ABC Insurance Company decided to automate most of its personal lines underwriting function. The company now uses standardized application forms that are submitted electronically to one of the company's regional offices. At each regional office, a computer with a scanner reads the applications. The computer has been programmed with acceptable answers to the questions. If the answers on the application are all accept
D
Jean is the Risk Manager for a Fortune 1000 company. Her CFO has tasked her to analyze vulnerabilities in the firm's supply chain. The adequacy of suppliers to meet an organization's needs would be an example of which one of the following types of risk? A. Financial risk B. Strategic risk C. Operating risk D. Operational risk
D
Lucy is a chef at a restaurant. She is growing tired of working such long hours and not reaping the financial benefits. Lucy has been saving money with the goal of opening her own restaurant. She recently talked to a financial advisor about the options market as a way to grow her savings quickly. The financial advisor explained that it is a risky choice, but could potentially allow her to reach her goal of owning a restaurant in the near future. Lucy has decided to invest her savings in the opti
D
One advantage that a national organization would derive from creating risk centers is that it A. May allow risks to be managed on a small scale thereby relieving the organization from focusing attention on it. B. Allows more independence for the risk centers so that they are not burdened with procedures. C. May segregate risks to protect the larger organization if the risk center fails. D. Allows for participation by operational managers who may contribute to the risk analysis.
D
One of the strategic objectives for Cromley Insurance Group is customer satisfaction. Which one of the following is a critical success factor (CSF) that would help refine this strategic objective? A. High profitability B. Increase retention ratio by 5% C. Reduce claim activity by 4 to 6% D. High customer retention
D
Precision Electronic Components manufactures circuit boards, microchips, and other electronic products. Given the precision necessary for their products, the manufacturing environment must be controlled. Temperature, humidity, static electricity and other factors must be monitored. After losing several batches of products due to human monitoring failures and imprecise adjustments, the company moved to a system of sensors. The sensors monitor and regulate temperature, humidity, static electricity
D
Take Your Order (TYO) is a company that specializes in taking product orders for vendors. The manufacturer of a product can run a television or internet ad for a product with a toll-free number. Customer calls for the products are routed to TYO, where one hundred operators are available to receive the calls. Each operator is assigned a cubicle with a computer terminal, video display monitor, and a telephone. TYO experienced high workers compensation claims from its operators, claiming neck strai
D
The service representatives for Tauton Insurance will be eligible for a bonus only if the customer retention rate is increased by 5%. This is an example of which one of the following standards? A. A critical success factor derived from a strategic objective B. A severe risk tolerance level C. A key performance indicator based on financial ratios D. A corrective measure linked with an identified tolerance level
D
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. Seek feedback from stakeholders B. Stay focused on the organization's objectives C. Define the organization's risk appetite D. Enhance stakeholders' confidence in the process
D
Which one of the following answers the question, "What shows we are a success?" A. Risk tolerance level B. Strategic objective C. Critical success factor D. Key performance indicator
D
Which one of the following best explains how most smart products potentially improve risk management? A. They measure worker fatigue. B. They scan and inspect structures for unsafe conditions. C. They assess risks in dangerous areas. D. They generate big data to which advanced analytics can be applied.
D
Which one of the following functions of a data management program would allow accounting transactions to automatically update an organization's financial statements? A. Data governance B. Data access C. Data preparation D. Data integration
D
Which one of the following is an example of an external key risk indicator (KRI) that a manufacturer might monitor? A. Amount of budget variances B. Number of employee injuries C. Age of accounts payable D. Cost of raw materials
D
Which one of the following is an example of an internal key risk indicator (KRI) that a contractor might monitor? A. Cost of lumber B. Interest rates C. Availability of skilled labor D. Budget variances
D
Which one of the following organizational policies or practices is based on a code of ethics? A. An annual compliance audit of each field underwriting office that is conducted by the home office staff B. The designation of 2 workdays a year for employees to participate in local civic and volunteer activities C. A company policy that offers a 10 percent discount to teachers and members of the military D. A disclosure requirement regarding any potential conflict of interest an accountant might hav
D
Which one of the following statements is correct regarding the personal data and privacy positions of the European Union (EU) and the U.S.? A. Class-action lawsuits over privacy are commonplace in the EU, but rare in the U.S. B. The U.S. has a stronger cultural expectation of privacy than the EU. C. U.S. companies are required to comply with the EU's General Data Protection Regulation (GDPR) only if they have employees in the EU. D. The EU has one all-encompassing data protection framework and t
D
Which one of the following uses infrared light to detect nearby objects? A. Wearables B. Drones C. Robots D. Lidar
D
