ARM - Associate in Risk Management Risk Identification and Analysis Questions and Answers

Question 1

A risk manager is using a risk analysis technique that starts with a top-level event (e.g., system failure) and deductively works backward to identify all the potential underlying causes. This technique uses logic gates like 'AND' and 'OR' to model the relationships between events. Which risk analysis technique is being used?

Accepted Answer

Fault Tree Analysis (FTA)

Answer

Fault Tree Analysis (FTA) is a top-down, deductive failure analysis where a system's potential failure is traced back to its root causes. It uses Boolean logic to show how component-level failures can lead to a top-level undesired event. [3, 6, 11]

Question 2

A manufacturing company is conducting a comprehensive risk identification process. The risk management team decides to analyze the company's internal capabilities, such as its skilled workforce and proprietary technology, as well as external factors like new market entrants and changing regulations. Which of the following identification tools is best suited for this type of analysis?

Accepted Answer

SWOT Analysis

Answer

SWOT Analysis is a strategic planning technique used to identify Strengths, Weaknesses, Opportunities, and Threats related to a project or business venture. It is ideal for evaluating both internal (Strengths, Weaknesses) and external (Opportunities, Threats) factors. [22, 27, 28]

Question 3

Which of the following is a key characteristic of Event Tree Analysis (ETA)?

Accepted Answer

It graphically represents the consequences of a single initiating event.

Answer

Event Tree Analysis (ETA) is an inductive, 'forward-looking' method that starts with an initiating event and explores the various possible outcomes or consequences by analyzing the success or failure of subsequent safety functions or events. [3, 6, 9]

Question 4

A risk manager for an airline wants to create a single, comprehensive diagram to visualize a specific high-consequence risk, such as an engine failure. The diagram should show the potential causes (threats) on the left, the critical event in the center, and the potential consequences on the right, along with the preventative and mitigating controls. Which analysis method would be most appropriate?

Accepted Answer

Bow-Tie Analysis

Answer

Bow-Tie analysis is a visual risk assessment tool that combines elements of Fault Tree Analysis (left side, for threats/causes) and Event Tree Analysis (right side, for consequences) into a single diagram. The 'knot' in the middle represents the critical event or hazard. [7, 12, 14]

Question 5

A project team is creating a risk register for an upcoming software development project. Which of the following pieces of information is LEAST likely to be included for each identified risk in the initial risk register?

Accepted Answer

The detailed, step-by-step mitigation plan.

Answer

While a risk register documents identified risks, their probability, impact, and owner, the detailed, step-by-step mitigation plan is typically developed as part of the risk response planning phase, after the initial identification and analysis. The register might initially note the response strategy (e.g., avoid, mitigate, transfer, accept), but the full plan comes later. [16, 17, 23]

ARM - Associate in Risk Management Practice Test

ARM - Associate in Risk Management Practice Test

ARM - Associate in Risk Management Risk Identification and Analysis Questions and Answers