ARM400 Practice Exam Questions

In this blog, we will break down two example ARM™ 400 exam questions. These questions are taken directly from our ARM™ 400 Online Course, the questions are designed to mimic the format and feel of the actual exam.

About the ARM™ 400 Exam Questions

The ARM™ 400 exam is a 65-minute virtual exam consisting of 50 multiple-choice questions. Exams are virtual, and non-proctored, meaning you take the exam alone online directly from your computer. All questions on the virtual exam will be application-based scenario questions. These are tricky questions that require you to apply your knowledge to a real-life scenario to choose the appropriate answer (you will not be repeating a definition or concept). You will be given a real-life scenario; your job will be to select the best recommendation to solve the given scenario.

If you have not previously taken an institute’s administered exam, you will be in for quite the surprise. The questions on these ARMexams will be much different than what you may be used to on a typical exam that you took in high school or college. These questions require you to fully understand every aspect of the main topics and require you to actually apply the knowledge, rather than just repeating a definition. I cannot stress this importance enough, the content of the ARM™ 400 exam is not difficult, but the format is tricky. You must fully understand a topic, DO NOT simply memorize definitions and think you will be able to pass (trust me, I’ve been there!)

You can download one of our free practice exams to see what these questions look like.

Time constraint

Remember, the ARM™ 400  exam consists of 50 multiple-choice questions and you only have 65 minutes to complete the exam. That means, you only have about 1 minute and 18 seconds per exam question. That’s not a lot of time. You need to memorize all of the content of this exam to be able to quickly read, analyze, and correctly answer each scenario-based question.

ARM 400™ Sample Exam Questions (First Sample Question)

ABC Toy Manufacturing Company opened a new warehouse with the best manufacturing equipment available. With this new equipment, senior management states that the company will produce 500 units per day and 3,500 per week. This will be measured and reviewed by senior management periodically. This is an example of what?

A) A lagging KPI

B) A leading KPI




Answer: A

KPIs are an important part of the ARM 400™ exam.

Key performance indicators (commonly abbreviated as “KPIs”) measure how an individual, team, or organization is performing as they work toward their goals. Using KPIs helps the organization define and measure progress. There are different types of KPI. Some are quantitative and expressed in terms of numbers, such as producing 1000 tons of steel in a year (or losing 1 pound per week). Others are qualitative and may be harder to measure, like being a good listener or making everyone feel like they are part of a team.

KPIs vary in their relationship to time. There are two types of KPIs, leading KPIs and lagging KPIs

  • Leading KPIs measure something that starts to change before an organization moves in a specific direction.
  • Lagging KPIs are measured after a change has been made. (Most KPIs are lagging.)

In this case, since management for ABC Toy Manufacturing will be reviewing the new production capacity periodically (meaning after the change is made) we can determine that this is a lagging KPI.

On your exam, you will be given a scenario like the one seen above; it is your job to understand what is being asked of you and how to solve or recommend a solution to the scenario. For more application-based questions, download our free ARM 400 practice exam.

ARM 400™ Sample Exam Questions (Second Sample Question)

Which of the following describes a clan culture?

A) ABC Company is managed from the top down. Shannon, the CEO, only meets with her core team of three advisors. Each advisor has a team of five managers. Each manager reports the progress from their team of 20 employees.

B) David’s software business has a loyal customer base of 1,500 subscribers. His main goal is to serve these subscribers, to retain their business, while bringing on new clients.

C) Leslie’s team seeks risk. They look to grow as quickly as possible, even if it means taking risks that no other business would accept.

D) Billy, manager of Billy B Corporation, describes his team of 20 employees as “family”. Employees are encouraged to speak directly to Billy to suggest improvements.


Answer: D 

Clan culture is a firm that functions like a family. Teamwork and cooperation are crucial, and workers in these firms are encouraged to suggest improvements.

There are four main kinds of corporate cultures

  • Adhocracy Cultures: As the term “ad hoc” suggests, adaptability is key in this kind of culture, and authority shifts as is needed to adapt.
  • Clan Cultures: This firm functions like a family. Teamwork and cooperation are crucial, and workers in these firms are encouraged to suggest improvements.
  • Hierarchical Cultures: In these cultures, authority is well defined. People know who is in charge and how things work, and rules are uniform.
  • Market Cultures: Profit is the top priority in market cultures. As a result, they focus on external relationships, pay attention to their strength relative to their niche, set stretch goals, track results, and work to maintain a stable base of customers.

Out of the four answer options, we can see that the scenario in answer option D best exemplifies clan culture.

This is a common type of question you will see in your exam, where the question is simple but the answers of the questions are formatted as a real-life scenario. For more scenario-based questions, download our free ARM 400 practice exam.

Free Practice Exam

Ready to get started studying? We’re here to help (for free). Download our free ARM™ 400 practice exams to get a feel for the type of questions you will see on the exam.

Download: Free Practice Exam (CPCU® | ARM™ | AINS™ | API™)


More Information

For more information about the ARM™ 400 exam, checkout some of our other free resources:



Difficulty rank, importance rank, and the advice provided in this resource are solely the opinion of AssociatePI. This resource is intended to provide you with a general idea of where your focus should be. Each exam administered by The Institutes is different. AssociatePI is not affiliated with The Institutes or involved in the exam writing process. Please be sure to thoroughly study every chapter and every topic of this course.

ARM™ exams are administered by the American Institute for Chartered Property Casualty Underwriters (“The Institutes”). AssociatePI does not administer the actual exams, we are an independent resource of free content, advice, and study material for professional insurance education. This blog is intended for informational purposes only, to inform prospective students of the benefit of the ARM™ designation.

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