Let's se if I can remember what they taught me in Submarine School...
An object which floats will displace its exact weight of water. The floating object's volume is greater than the volume of water displaced.
An object that has neutral bouyancy displaces its exact weight of water. The volume of the suspended object equals the volume of of water displaced.
An object that sinks will displace less water weight than its own weight. The volume of the object is the same as the volume of water displaced.
So, the density of the water (or liquid) and object needs to be known.
The arm has a certain density and volume. If the density of the arm is greater the the density of the water then an upward force needs to be applied to keep it suspended. It will displace a given volume of water. So the amount of weight increase in the tank of water would be the weight of water displaced by the arm less the upward force to keep the arm suspended. (Weight is a force, mass X acceleration of gravity)
Conversely, if the arm is less dense than the water, a downward force must be applied to the arm to keep it suspended. So the weight increase of the tank will be the weight of the volume of water displaced plus the downward force...
So, to sum it all up:
Objects that float have more volume that the displaced water and the floating objects density is less than the liquid.
Suspended Objects (neutral bouyancy) both object and liquid have the same density.
Sinking objects have equal volumes of displacement and the objects density is greater than the liquids.
Clear as mud. Right?