ARM Risk Treatment and Mitigation 2

Question 1

A manufacturer keeps a full set of critical machine parts at an off-site warehouse that is used only if the primary stock is destroyed. Which risk control technique is this?

Accepted Answer

Duplication

Answer

Duplication relies on backups or spares that are not used in daily operations unless a loss occurs.

Question 2

A retailer splits its inventory evenly between two warehouses that both ship orders every day. Which risk control technique does this illustrate?

Accepted Answer

Separation

Answer

Separation spreads assets or activities across locations that are all used in normal operations, which limits the loss from any one event.

Question 3

An automatic sprinkler system in a warehouse is mainly an example of which risk control technique?

Accepted Answer

Loss reduction

Answer

Sprinklers do not stop fires from starting, but they reduce how severe a fire becomes.

Question 4

Which statement best describes a major limitation of exposure avoidance as a risk treatment?

Accepted Answer

It gives up the benefits of the avoided activity and may not be feasible for core operations

Answer

Avoidance removes the chance of loss entirely, but the organization also loses whatever the activity would have earned.

Question 5

Diversification as a risk control technique applies mainly to which type of risk?

Accepted Answer

Speculative business risks

Answer

Diversification spreads business risk across different products, markets, or customers, which mainly affects speculative risk.

ARM - Associate in Risk Management Practice Test

ARM - Associate in Risk Management Practice Test

ARM Risk Treatment and Mitigation 2