ARM 400 - Segment A

Question 1

big data

Answer 1

sets of data that are too large to be gathered and analyzed by traditional methods

Question 2

smart products

Answer 2

an innovative item that uses sensors, wireless sensor networks, data collection, and analysis to further enable the item to be faster, more useful, or otherwise improved

Question 3

internet of things

Answer 3

a network of objects that transmit data to and from each other without human interaction

Question 4

cloud computing

Answer 4

information, technology, and storage services contractually provided from remote locations, through the internet or another network, without a direct server connection

Question 5

blockchain

Answer 5

a digital leger that facilitates secure transactions without the need for a third party

Question 6

telematics

Answer 6

the use of technological devices in vehicles with wireless communication and GPS tracking that transmit data to businesses or government agencies; some return information for the driver

Question 7

text mining

Answer 7

obtaining information through language recognition

Question 8

risk appetite

Answer 8

amount of risk an organization is willing to take on in order to achieve an anticipated result or return

Question 9

value-at-risk

Answer 9

a technique to quantify financial risk by measuring the likelihood of losing more than a specific dollar amount over a specific period of time

Question 10

downside risk

Answer 10

the potential for a significant financial loss or negative outcome, focusing primarily on the worst-case scenario where an investment or insured asset experiences a decline in value

Question 11

cost of risk

Answer 11

the total cost incurred by an organization because of the possibility of accidental loss

Question 12

non-insurance indemnity

Answer 12

contractual agreement where one party agrees to compensate another party for losses or damages incurred, without the involvement of an insurance policy

Question 13

deterrent effects

Answer 13

the impact of legal punishment on individuals or the use of technology to encourage certain behaviors

Question 14

exposure

Answer 14

any condition that represents a possibility of a gain or loss, whether or not an actual loss occurs

Question 15

volatility

Answer 15

frequent fluctuations, as in the price of an asset

Question 16

likelihood

Answer 16

a qualitative estimate of the certainty with which the outcome of a specific event can be predicted

Question 17

consequences

Answer 17

the effects, positive or negative, or an occurrence

Question 18

time horizon

Answer 18

estimated duration of risk acceptance (longer durations = higher risk)

Question 19

correlation

Answer 19

a relationship between variables (higher correlation means higher overall risk)

Question 20

pure risk

Answer 20

a chance of loss or no loss, but no chance of gain

Question 21

speculative risk

Answer 21

involves a chance of gain – every business venture involves speculative risks

Question 22

price risk

Answer 22

uncertainty about cash flows resulting from possible changes in the cost of raw materials and other inputs

Question 23

credit risk

Answer 23

the risk that customers or other creditors will fail to make promised payments as they come due

Question 24

subjective risk

Answer 24

the perceived amount of risk based on an individual’s or organization’s opinion

Question 25

objective risk

Answer 25

the measurable variation in uncertain outcomes based on facts and data

Question 26

diversifiable risk

Answer 26

risk that affects only some individuals, businesses, or small groups

Question 27

systemic risks

Answer 27

the potential for a major disruption in the function of an entire market or financial system

Question 28

market risk

Answer 28

uncertainty about an investments future value because of potential changes in the market for that type of investment

Question 29

liquidity risk

Answer 29

the risk that an asset cannot be sold on short notice without incurring a loss

Question 30

risk management framework

Answer 30

a foundation for applying the risk management process throughout the organization

Question 31

risk criteria

Answer 31

information used as a basis for measuring the significance of a risk. Considers factors such as causes of risks; effects of risks; metrics used to measure effects of risk; timeframe of potential effects of risk; methods to determine level of risk; and approach to combinations of risk and systemic risks

Question 32

internal control

Answer 32

a system or process than organization uses to achieve its operational goals, internal and external financial reporting goals, or legal and regulatory compliance goals

Question 33

insurtech

Answer 33

the use of emerging technologies in the insurance industry

Question 34

risktech ecosystem

Answer 34

a system that uses technology to identify, measure, manage, and reduce risks. It’s part of a connected risk approach and combines risk management with technology to improve decision-making

Question 35

sensor

Answer 35

a device that detects stimuli in its environment

Question 36

preventive analytics

Answer 36

statistical and analytical techniques used to influence or prevent future events or behaviors

Question 37

transducer

Answer 37

a device that converts one form of energy into another

Question 38

actuator

Answer 38

a mechanical device that turns energy into motion or otherwise effects a change in position or rotation using a signal and an energy source

Question 39

accelerometer

Answer 39

a device that measures acceleration, motion, and tilt

Question 40

digital twin

Answer 40

virtual model of a physical objects, system, or process that uses real-time data to simulate its behavior and monitor operations

Question 41

computer vision

Answer 41

a field of AI that uses machine learning and neural networks to teach computers to analyze visual inputs, such as images and videos