ARM Risk Control and Mitigation Strategies 2

Question 1

A manufacturer installs an automatic sprinkler system in its warehouse. Which risk control technique does this primarily represent?

Accepted Answer

Loss reduction

Answer

Sprinklers do not stop fires from starting but limit the severity of fire losses once they occur, which is loss reduction.

Question 2

Which risk control technique is the only one that reduces the probability of loss from a specific activity to zero?

Accepted Answer

Avoidance

Answer

Avoidance eliminates the exposure entirely by abandoning or never undertaking the activity, so the chance of loss becomes zero.

Question 3

A company stores backup copies of critical records at an off-site data center that is used only if the primary records are destroyed. This is an example of:

Accepted Answer

Duplication

Answer

Duplication keeps spare or backup assets that are not used in daily operations and are activated only after a loss.

Question 4

A retailer spreads its inventory across four warehouses that are all used in daily operations. Which technique is being applied?

Accepted Answer

Separation

Answer

Separation disperses assets that are actively used in operations so that a single event cannot damage them all.

Question 5

Under Haddon's energy release theory, requiring workers to wear hard hats is best described as a strategy that:

Accepted Answer

Separates the energy from the person with a physical barrier

Answer

A hard hat places a barrier between the released energy and the person exposed to it.

ARM - Associate in Risk Management Practice Test

ARM - Associate in Risk Management Practice Test

ARM Risk Control and Mitigation Strategies 2