ARM Study Guide 2026
Everything you need to pass the ARM exam in one place: the exam format, every topic to study, real practice questions with explanations, flashcards, and full-length practice tests. Free, no sign-up needed.
📋 ARM Exam Format at a Glance
📚 ARM Topics to Study (21)
✍️ Sample ARM Questions & Answers
1. What is the FIRST step in developing a business continuity program?
The BIA must be conducted first to identify critical business functions and prioritize recovery efforts before developing specific continuity strategies.
2. Which regulatory body oversees financial risk management in the U.S.?
The Securities and Exchange Commission (SEC) is a U.S. federal government agency responsible for protecting investors, maintaining fair and orderly functioning of securities markets, and facilitating capital formation. It oversees financial risk management by regulating public companies, financial markets, and investment professionals, ensuring transparency and compliance with financial reporting standards.
3. How does risk pooling benefit insurance companies?
Risk pooling is a fundamental principle of insurance where many policyholders contribute premiums to a common fund. This allows the insurer to distribute the financial burden of losses across a large group. When a loss occurs to one policyholder, the cost is shared by the collective, making individual losses manageable and predictable for the insurer.
4. When evaluating a potential risk control measure, a risk manager performs a cost-benefit analysis. Which of the following is the primary goal of this analysis in the context of risk treatment?
The core principle of a cost-benefit analysis for risk controls is to determine if the investment is economically sensible. The goal is to ensure that the resources expended on the control are less than or equal to the financial benefit gained from the reduction in risk.
5. Which analysis tool assesses an organization's internal strengths and weaknesses alongside external opportunities and threats?
SWOT analysis evaluates internal Strengths and Weaknesses and external Opportunities and Threats to inform strategic risk decisions.
6. Business interruption insurance in the context of business continuity primarily covers:
Business interruption insurance replaces lost revenue and covers fixed operating expenses during the period when normal operations are suspended due to a covered loss.