ARM ARM Business Continuity and Resilience 1 — Questions and Answers
Question 1: What is the primary objective of a Business Continuity Plan (BCP)?
- To maximize profitability during normal operations
- To ensure critical business functions can continue during and after a disruption (Correct answer)
- To eliminate all operational risks
- To reduce the organization's insurance premiums
Correct answer: To ensure critical business functions can continue during and after a disruption
A BCP ensures that an organization's critical functions remain operational or are quickly restored when disruptions occur.
Question 2: In business continuity planning, a Business Impact Analysis (BIA) primarily determines:
- The organization's total insurance coverage needs
- The critical business functions and the impact of their disruption (Correct answer)
- The probability of a natural disaster occurring
- The organization's credit risk exposure
Correct answer: The critical business functions and the impact of their disruption
A BIA identifies which business functions are critical and quantifies the potential financial and operational impact of disrupting those functions.
Question 3: What is the 'Recovery Time Objective' (RTO)?
- The total cost of recovering from a disaster
- The number of staff needed to restore operations
- The maximum acceptable length of time to restore a business process after disruption (Correct answer)
- The minimum financial reserve required for recovery
Correct answer: The maximum acceptable length of time to restore a business process after disruption
RTO defines the maximum tolerable downtime for a business process before the disruption causes unacceptable consequences.
Question 4: Which of the following BEST describes organizational resilience?
- The ability to prevent all disruptions from occurring
- The capacity to anticipate, prepare for, respond to, and adapt to incremental change and sudden disruptions (Correct answer)
- The organization's total insurance coverage value
- The speed at which new employees can be hired after a crisis
Correct answer: The capacity to anticipate, prepare for, respond to, and adapt to incremental change and sudden disruptions
Organizational resilience encompasses proactive preparation and adaptive capacity to maintain function through any type of disruption or change.
Question 5: A 'hot site' in business continuity planning refers to:
- A geographic region with high natural disaster risk
- A fully equipped backup facility that can immediately assume operations after a disruption (Correct answer)
- A location where sensitive documents are archived
- An online portal for reporting risk incidents
Correct answer: A fully equipped backup facility that can immediately assume operations after a disruption
A hot site is a fully operational duplicate of the primary facility that can take over operations immediately with minimal activation time.
Question 6: What distinguishes a disaster recovery plan from a business continuity plan?
- Disaster recovery focuses on preventing disasters while BCP focuses on response
- Disaster recovery specifically addresses IT and technology restoration, while BCP covers all critical business functions (Correct answer)
- Disaster recovery applies only to financial institutions
- There is no distinction between the two plans
Correct answer: Disaster recovery specifically addresses IT and technology restoration, while BCP covers all critical business functions
Disaster recovery focuses primarily on restoring IT systems and data, while a BCP encompasses the full range of critical business operations.
ARM ARM Business Continuity and Resilience 1
What is the primary objective of a Business Continuity Plan (BCP)?