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Risk 2 simplelearn-exam1-ans

The document provides examples of risk management questions and answers. It includes questions related to calculating Cost Performance Index, probability-impact matrix, customer satisfaction as a risk, qualitative risk analysis tools, risk responses such as mitigation, transference and acceptance, and other risk management processes and techniques.

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1 . A PM has created a contingency response that the cost performance index should be less than 0.80. The project has a budget at completion of $100,000 and is 35 percent complete - though the project should be 50 percent complete. The project has spent $45000. What is the project's cost performance index? 1.28 0.7 0.77 1,42 Answer: c) CPI=EV/AC. EV=100000*35%=35000. AC= 45000. CPI=35000/45000=0.77. 2. Consider the risk probability-impact matrix in the figure given below: If Risk B happens in this project, how much will be left in the contingency reserve? 220000 -452500 It depends on the total budget of the project. -232500 Answer: a) The total EMV comes to 452500 and if B happens then the left out is $220000. 3 . You are managing the project along with key stakeholders. One of the key requirement from customer is their satisfaction and even the other stakeholders believe in this. As a project manager what do you think or is your action about this point from risk management point of view? Achieving customer satisfaction is an assumption and should be documented in the project scope. Achieving customer satisfaction is a subjective requirement and entails a high level of risk of being successfully accomplished Achieving customer satisfaction is a risk as the project manager cannot control how satisfied the customer will be with the project deliverables. Achieving customer satisfaction should always map to the quality requirements for the project. Answer: b) Customer satisfaction differs so is subjective.
4 . Which process performs the probability and impact analysis? A risk probability-impact matrix Quantitative risk analysis Seven risk responses Qualitative risk analysis Answer: d) After the identification risk, one should carry out the qualitative risk analysis. 5 . You are working to complete the qualitative risk analysis for your project. During the analysis you encourage the project team to begin the grouping of identified risks by common causes. What is the primary advantage to group risks by common causes during qualitative risk analysis? It helps the project team realize the areas of the project most laden with risks. It saves time by collecting the related resources, such as project team members, to analyze the risk events. It can lead to developing effective risk responses. It can lead to the creation of risk categories unique to each project. Answer: c) It helps in categorization and carrying out effective risk management. 6 . The project team is in the process of developing risk responses. While dealing with a particular risk, the team discover that it cannot be avoided and attempts to transfer or mitigate the risk is unsuccessful. What the team should do? Continue to investigate to find ways to transfer Accept the risk Reduce the project scope so that risk can be avoided Continue investigating ways to reduce the impact of the risk. Answer: b) Accept the risk, wait and watch.
7 . You are working on a mobile cell phone project which calls for erecting towers. While planning, you identified that there is a risk of erecting all the towers very late in the financial year which will affect the revenue growth of the organization. You decide to approach the competitors who already erected the towers and is in operation, to use their tower on revenue sharing model. Which of the following response is being taken to overcome the risk? Mitigate Share Exploit Enhance Answer: b) The project manager is asking the other companies to partner and they can all share in the benefits of it. 8 . Teaming agreement solution refers to which risk response? Transference Acceptance Mitigation Sharing Answer: d) As we know join venture for example is sharing the risk and considered an opportunity for all the parties. 9 . You are working with the project stakeholders on the qualitative risk analysis process in your project. You have used all the tools to the qualitative risk analysis process in your project. Which of the following techniques is NOT used as a tool in qualitative risk analysis process? Risk Urgency Assessment Risk Categorization Risk Reassessment Risk Data Quality Assessment Answer: c) Risk reassessment is used in control risk process.
10 . You are using the applications of IRGC model to understand and manage the rising of the overall risks that have impacts on the economy and society. One of your team member wants to know what is the need to use IRGC. What will be your reply? IRGC addresses questions such as the understanding of the secondary impacts of a risk. IRGC models aim at building robust, integrative inter-disciplinary governance models for emerging and existing risks. IRGC addresses the development of resilience and the capacity of organizations and people to face unavoidable risks. IRGC is both a concept and a tool. Answer: b) IRGC which is International Risk Governance Council model supports in building governance for the risk management. Please refer to www. Irgc. Org. 11 . You are the project manager of your organization. Your organization will receive a bonus if the project finishes before Christmas . The bonus amount is about $700,000. After assessing the situation considering the trend and the forecast, you realize that by spending about $200,000 with crashing technique, the goal can be achieved. What is the response you are taking here? Crashing can be a type of the enhancing risk response. Crashing can be considered transference because of the $275,000 is actually paid from the bonus, which is paid by the project customer. Crashing can be a type of the exploit risk response. Crashing is the addition of labor, not a risk response. Answer: a) It's motivation for the team and which results in enhancing the opportunity. 12 . You identified a supplier who can create stained glass windows for 1,000 window units in a construction project. The supplier is an artist who works by himself, but creates windows for several companies throughout the United States. Management reviews the proposal to use this supplier and while they agree that the supplier is talented, they do not think the artist can fulfill the 1,000 window units in time for the project's deadline. Management asked you to find a supplier who can fulfill the completion of the windows by the proposed date in the schedule. What risk response has management asked you to implement? Mitigation Acceptance Avoidance Transference Answer: a) Mitigation is used to reduce the impact on the project schedule.
13 . While identifying risks for a new construction project, you discover that a chemical you are using on your building cannot be applied in rainy conditions. You also learn that your project will be ready for the chemical application around the time when most of the rainfall happens in that part of the country. Since the project can't be delayed until after the rainy season and you need to make sure the building gets the chemical coating. You decide that your team will just have to work around the rain. Which strategy is this an example of? Mitigate Exploit Accept Transfer Answer: c) This is an example of accepting a risk. The team can't do anything about the weather, so the project manager has accepted the fact that they could end up being delayed by it. 14 . You are reviewing the risk register for your project. The risk register provides information to you, the project manager and to the project team during the risk response planning. All of the following are included in the risk register except for which option? Network diagram analysis of critical path activities Symptoms and warning signs of risks List of potential risk responses Trends in qualitative risk analysis results Answer: a) Schedule management plan provides the information about network diagram. 15 . Along with your team members you are facilitating about risk response analysis along with understanding of each response from the team point of view. Which of the following activities are you carrying out? Risk audits Stakeholder analysis as the project team is a stakeholder Risk identification with the project team Risk analysis Answer: a) Risk Audits helps in evaluate the effectiveness of risk response and the overall risk management.
16 . Decision tree can be classified as Expected monetary value Probabilistic outcome method Earned value method Modeling and simulation Answer: b) The decision tree is a diagram describing different decisions under consideration and the impact on the project of choosing one over the another. 17 . In which process does the tool Ishikawa or cause and effect diagram tool used? Identify Risks Qualitative Analysis Quality Control Plan Risk Responses Answer: a) Don't assume that every time you see a fishbone diagram the question is talking about Quality Control. Diagramming Techniques (including Ishikawa diagrams and Flowcharts) are a tool of the identify Risks process. You use them to find the root cause of defects in Quality Management processes but they can also be useful in finding the risks that can lead to trouble in Risk Management. 18 . The project team is in the process of performing qualitative risk analysis. All of the following updates will be included within the risk register updates except: List of risks requiring additional analysis List of low priority risks Probability of achieving time objectives Risks grouped by categories Answer: c) Probability of time objectives is included during plan risk response process. 19 . Which of the following will not increase the quality risk? Crashing Overlapping Fast tracking Concurrent Engineering Answer: a) Crashing adds to the cost risk.
20 . You and the project team have identified the risk that the project may not complete on time, as required by the management, due to the creation of the user guide for the software you're creating. You have elected to hire an external writer in order to satisfy the requirements and to alleviate the risk event. What type of risk response have you elected to use in this instance? Avoidance Exploiting Transference Sharing Answer: c) Transference is used to transfer the activities which is not of self expertise. 21 . You are the project manager for your company and a new change request has been approved for your project. This change request, however, has introduced several new risks to the project. You have communicated these risk events and the project stakeholders understand the possible effects these risks could have on your project. You are elected to create a mitigation response for the identified risk events. Where will you record the mitigation response? Risk register Risk log Risk management plan Project management plan Answer: a) The risk register should update with risk response. 22 . You are about to perform qualitative risk analysis on the identified risks within your project. Which one of the following will NOT help you to perform this project management activity? Scope baseline Risk management plan Risk register Stakeholder register Answer: d) Stakeholder register is the output of identify stakeholder process.
23 . Which risk response indicates the allocation of ownership of opportunity to third party? Share Exploit Enhance Venture Answer: a) Share is joint ownership. 24 . Once the risks have been identified on the project, the next step is to manage the risks. Of the following, which is not a suitable way of managing the risks? By using existing assets By contingency planning By investing in new resources By Brainstorming Answer: d) Brainstorming is a tool and technique for risk identification. All of the other options are ways of managing the risks. Existing assets may involve improvements to existing methods and systems, changes in responsibility, etc. Contingency planning may help you in minimizing the effect, if it happens. Investing in new resources may help in reducing or insuring you against risk. 25 . Communication management plan contains all of the following except: Risk reporting formats Escalation process of issues Communication related terms Frequency of communication Answer: a) Risk reporting format is included as part of risk management plan.
26 . What are the strategies for dealing with positive risks? Avoid, mitigate, transfer, accept Transfer, mitigate, avoid, exploit Exploit, share, enhance, accept Mitigate, enhance, exploit, accept Answer: c) Positive risks are opportunities that could happen on your project. The strategies for dealing with them are all about making sure that your project is in a position to take advantage of them or at least share in them with other projects if possible. 27 . The project has a budget of $567,000 and is schedule to last for three years. You want to examine the risk events to determine which risk events have the most potential impact on the project. Which modeling technique can help you to accomplish this goal? Expected monetary value Sensitivity analysis Quantitative risk analysis Modeling and simulation Answer: b) Sensitivity analysis determines which is having most impact with risk. 28 . All of the following statements are true regarding risk events except which one? Choose the least correct answer. Project risks are uncertain events. If risks occur, they can have a positive or negative effect on project objectives. Unknown risks are threats to the project objectives, and nothing can be done to plan for them. Risks that have more perceived rewards to the organization than the consequences of the risk should be accepted Answer: c) Unknown risks might be threats or opportunities to the project, and the project manager should set aside contingency reserves to deal with them.
29 . In addition to monitoring and controlling the project risks for their status and information, the risk monitoring and controlling process accomplishes four key things for a project. Which one of the following is NOT a determination that is made by the risk monitoring and controlling process? Determines if the project assumptions are still valid Determines if the risk management policies and procedures are being followed Determines if the risk contingency reserves should be modified so that it is aligned with the current risk assessment Determines if the project constraints are still valid Answer: d) Choices A, B and C are the tools and techniques. 30 . All of the following are tools and techniques for Control Risks except: Earned value analysis Project risk audits Technical performance measurements Exploitation Answer: d) Exploit is a strategy for opportunities under the tools and techniques of the Plan Risk Responses process. It is associated with managing opportunity or risks that may have a positive impact on a project.. 31 . You are the project manager of a project that has recently finished the final project deliverables. The project customer has signed off on the project deliverable and you have a few administrative closure activities to complete. In the project, there were several large risks that could have wrecked the project but you and your project team found some creative methods to resolve the risks without affecting the project costs or project end date. What should you do with the risk responses identified during the project's monitoring and controlling process? Include the risk response in the project risk management plan. Include the responses in the project management plan. Nothing. The risk responses are included in the project's risk register already. Include the risk responses in the organization's lessons learned database. Answer: d) Lessons learnt is one of the important organization assets.
32 . As a project manager you decide to create an issue log which captures issue description, owner, and the target date for issue closure. All of the following are common examples of issues in the project except? Differences in Opinion Probable delay in the next delivery Pending root cause analysis Delay in receiving feedback from the customer Answer: b) Probable delay in the next delivery represents a project risk and is not an issue as the event is uncertain. This may or may not happen in future. 33 . Which diagramming technique are you using as a part of the risk identification process that helps in finding the causes of the issues? Cause and effect diagrams System or process flow charts Predecessor and successor diagramming Influence diagrams Answer: a) Cause and effect diagram used to find the causes of the defects. 34 . Which process addresses if any changes are to be implemented after risk analysis, the same is carried in controlled manner? Risk monitoring and control Scope change control Integrated change control Configuration management Answer: c) Change Control Board addresses all the changes through integrated change control process.
35 . As a project manager you are working with stakeholder to assess the qualitative and quantitative risk analysis. What is the best course of action when dealing with bias and attitude of the stakeholders considering risk management? Evaluate and document the bias towards the risk events Evaluate the bias through SWOT for true analysis of the risk events Document the bias for the risk events and communicate the bias with management Evaluate the bias towards the risk events and correct the assessment accordingly Answer: d) There should not be any bias during the risk management. 36 . All are inputs to Plan stakeholder management except for: Organization process assets Stakeholder register Risk Register Stakeholder management strategy Answer: c) Risk register is not an input. 37 . In a project there are certain enterprise environmental factors that require PM to use modeling and simulation techniques to predict the likelihood of achieving cost and schedule objectives in the project. PM is using a technique for which the cost estimates are chosen at random for each iteration of the analysis, such as pessimistic, most likely, and worst-case scenarios. What type of analysis is PM using in this project? Quantitative analysis Qualitative analysis Risk distribution Monte Carlo Analysis Answer: d) Monte Carlo analysis helps in carrying out quantitative risk analysis.
38 . You are in the middle of the project and one of the key stakeholder comes up with a change request. By looking into the change request, you realize that there will be an impact to the project from the schedule perspective, if this is implemented and also sure that because of the business advantage by this implementing this change, CCB is going to approve it. So considering the impact what is your first action? Mitigate the risk by asking a team member to get familiar with the feature of the software that might be changed Schedule a meeting with the stakeholder to discuss the risk Add the risk to the risk register and gather information about its probability and impact Add the risk to the issue log and revisit it when there is more information Answer: c) In the risk register enter the details and then go for the further analysis. 39 . Which of the following plan directs the process of quantitative risk analysis? Risk analysis plan Staffing management plan Human resource management plan Risk management plan Answer: d) Risk management plan guides the risk management. 40 . A project manager working on a construction project identifies a risk of a heavy storm in the coming months which might affect the construction activity. However, he doesn't have any reliable information on the weather forecast or the severity of the storm. In this case, what is the best project manager can do? Capture the Risk in the Risk Register Ignore the Risk as nothing can be done to avoid it Actively accept the risk and allocate time and cost reserve in contingency fund Proceed with Risk Response Strategy to counter the Risk Answer: c) In this situation the project manager has no information on the timing, anticipated frequency, or impact of the expected rough weather. Option (d) will not give any valuable information. The best option is (c) to accept the risk, but plan a contingency reserve in terms of cost and time in case the risk occurs. Option (a) and (b) are passive approach and are not recommended for a good project manager who should be always proactive in his approach towards risk management.
41 . You and project team have agreed that if the vendor is late by more than ten days they will cancel the order and hire another Company to fulfill the order. The new Company can guarantee orders within three days, but the costs of their products are significantly more expensive than the current vendor. What type of a response strategy is this? Internal risk management strategy Contingent response strategy External risk response Expert judgment Answer: b) Contingent response is plan B. 42 . All of the following are included in risk management plan except Contingency plan Approach to perform risk management activities Risk categories Estimated costs for risk activities Answer: a) Contingency plan will be done while carrying out the risk response process. 43 . You are managing a project which is very critical for the organization. But the key stakeholders are not attending the status and risk management meeting. What is this attributed as? Risk events Risk triggers Primary risks Residual risks Answer: b) A Risk trigger is referred to as a symptom of an impending risk event and signals the project manager to take action before the event occurs. Risk events are actual occurrences of an identified risk event. Primary and secondary risks are risk events identified by the project team or key stakeholders..
44 . You are the project manager managing a big team. During the risk management you carried out qualitative risk analysis and started quantitative risk analysis. One of the team members asked why you are carrying out quantitative risk analysis too? Which one of the following statements best defines what quantitative risk analysis is? Quantitative risk analysis is the process of numerically analyzing the effect of identified risks on overall project objectives. Quantitative risk analysis is the planning and quantification of risk responses based on probability and impact of each risk event. Quantitative risk analysis is the review of the risk events with the high probability and the highest impact on the project objectives. Quantitative risk analysis is the process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact. Answer: a) The definition of quantitative risk analysis is that it is the process of numerically analyzing the effect of identified risks on overall project objectives.. 45 . You added extra features to the project and this has introduced new risks to the project work. The project manager elects to remove the features that you added. The process of removing the extra features to remove the risks is called? Preventive action Corrective action Scope creep Defect repair Answer: a) Preventive action is to reduce and completely stop something negative that is happening to the project. 46 . You and your project team are just starting the risk identification activities for a project that is scheduled to last for 18 months. Your project team has already identified a long list of risks that need to be analyzed. How often should you and the project team do risk identification? It depends on how many risks are initially identified At least once per month Identify risks is an iterative process Several times until the project moves into execution Answer: c) Risk identification should happen throughout the project.
47 . For the risk identification process, we are using Ishikawa diagram. All of the following statements are true except for: Ishikawa diagrams are also called cause-and-effect diagrams. Ishikawa diagrams are also called fishbone diagrams. Ishikawa diagrams are a tool and technique of this process. Ishikawa diagrams show the steps needed to identify the risk. Answer: d) Cause-and-effect diagrams-also called Ishikawa or fishbone diagrams-show the relationship between the effects of problems and their causes. Kaoru Ishikawa developed cause and - effect diagrams. 48 . You are the project manager for a new project using a technology that has recently been released. There is relatively little information available about this technology. Initial testing of the technology looks promising, but while tracking the project, you discovered that there's still uncertainty as to its longevity and reliability. You want to consider the technology factors a risk for your project. Where should you document the risks associated with this technology so that you can track the risk status and responses? Risk register Risk low-level watch list Project scope statement Project charter Answer: a) Risk register capture all the risks irrespective of its nature. 49 . What is a risk owner? The person who monitors the watchlist that contains the risk. The person who meets with stakeholders to explain the risk. The person who makes a risk happen. The person who is responsible for the response plan for the risk. Answer: d) Every risk should have a risk owner listed in the register. That person is responsible for keeping the response plan up to date and make sure the right actions are taken if the risk does occur.
50 . You have been actively communicating and working with the project stakeholders. One of the outputs of the manage stakeholder expectations process can actually create new risk events in the project. Which output of the manage stakeholder expectations process create risks? Project document updates Change requests Organizational process assets updates Project management plan updates Answer: b) Change requests can impact other objectives in the project and can result in risk. 51 . Based on the enterprise environmental factors and the risk attitude of the stakeholders within the organization, what can be determined? Risk attitude can affect the measurement of probability and impact. Risk attitude can establish a stakeholder's influence over project decisions. Risk attitude identifies stakeholders that are hygiene seekers or motivation seekers. Risk attitude establishes stakeholders as positive or negative stakeholders. Answer: a) Risk appetite explains risk attitude which in turns provides probability and impact. The attitude can be organization and/or the individual. 52 . Which risk analysis tool is used to model your risks on a computer to show random probabilities? Computerized risk audit Monte Carlo analysis EMV analysis Delphi technique Answer: b) Monte Carlo analysis is a way of seeing what could happen to your project if probability and impact values changed randomly.
53 . You have completed the risk analysis processes for the risk events. You and the project team have created risk responses for most of the identified project risks. Now, you would like to assign risk owners to the events. Which risk events should have risk response owners? Only the risks with a high risk rating Each agreed-to and funded risk response should have a risk response owner Each risk that has a risk response should have a risk response owner Only the risk events that are considered a negative risk event with a high risk rating Answer: b) Once the risk response decided, the risk owner should be identified. 54 . Which of the following is not a communication method while addressing stakeholders and communicating with them? Interactive method Push method Pull Method Direct method Answer: d) The three types of communication methods are interactive, push and pull methods. 55 . You are working with the project team members and two subject matter experts to assess the identified risk events in the project. Which of the following approaches is the best to assess the risk events in the project? Determination of the true cost of the risk event Probability and Impact Matrix Root cause analysis Interviews or meetings Answer: d) Interaction with SME's is the best option to assess the risk events.
56 . Which of the following technique helps in finding any risk associated with respect to schedule? Project network diagrams Process flow charts Ishikawa diagrams Influence diagrams Answer: a) Network diagram shows the risk if there is any delay in the activities which are in the critical path. 57 . What is the significance of earned value technique from the risk management perspective when carrying out the variance and trend analysis as part of monitoring and controlling? You can determine a true project completion date. You can track the cost and schedule variances. You can review quality performance on baselines. You can forecast deviation of the project cost and schedule for completion targets. Answer: d) EVM provides variance, forecasting and performance measurement of the project. 58 . Your project has several risks that may cause serious financial impact, if they happen. You have studied the risk events and made some potential risk responses for the risk events but management wants you to do more. They'd like you to create a type of chart that identified the risk probability and impact with a financial amount for each risk event. What is the likely outcome of creating this type of chart? Risk response Quantitative analysis Contingency reserve Risk response plan Answer: c) Contingency reserve will be considered after the analysis.
59 . The risk transference is referred to the transfer of risks to a third party, usually for a fee, it creates a contractual relationship for the third party to manage the risk on behalf of the performing organization. Which one of the following is NOT an example of the transference risk response? Use of insurance Warranties Life cycle costing Performance bonds Answer: c) Life cycle costing is not a contractual. 60 . The --------- is the risk or danger of an action or an event, a method or a (technical) process that still conceives these dangers even if all theoretically possible safety measures would be applied. Residual risk Secondary risk Primary risk Pure risk Answer: a) residual risk is the risk which remains after the all the responses implemented. 61 . Management has asked you to perform a risk audit and report the results. A project team member asks you what a risk audit is. What do you tell the team member? A risk audit is a review of all the risks that have yet to occur and what their probability of happening are. A risk audit is a review of the effectiveness of the risk responses in dealing with identified risks and their root causes, as well as the effectiveness of the risk management process. A risk audit is a review of all the risk probability and impact for the risks, which are still present in the project but which have not yet occurred A risk audit is an audit of all the risks that have occurred in the project and what their true impact on cost and time has been. Answer: b) Risk audit helps in overall effective risk management.
62 . You are selecting a project for your organization from different customers. You have delivered projects for these customers earlier. From the previous history data you know that after delivering the projects, the payment system is not good in spite of the delivery as per the scope requirements. You feel that this can be a risk. What is the best you can do? Transference Mitigation Avoidance Acceptance Answer: c) The best thing that you can do with a risk is avoid it. Sometimes avoiding one risk can lead to another risk like not getting any projects. But one has to balance. 63 . A project manager knows that managing the expectations of stakeholders helps to increase the probability of project success by ensuring that stakeholders understand the project benefits and risks. For this process, he could use all of the following tools and techniques except? Issue Log Communication methods Active listening Writing skills Answer: a) An issue log is an input to the process Manage Stakeholder Expectations. All of the others are tools and techniques for the process. 64 . A project team is in the process of risk tracking and control. The risk control action defined by the mitigation and contingency plans is being implemented in accordance with the details of those plans. Who is responsible for implementing these actions? Project Manager Project Team Risk Owner Risk Manager Answer: c) The risk owner for that particular risk is responsible for implementing the actions defined by mitigation and contingency plan in risk management. A risk owner for a risk is identified during the planning stage of risk management and he helps to assess the risk and produce probability and impact information. He also develops risk mitigation and contingency plans, provides status data for respective risk issues and assists in evaluating risk control action effectiveness. The risk owner also documents threshold criteria of high and medium risks and supports the identification of new risks.
65 . Based on the information in the table below, what amount would you need to include in your risk contingency fund? 12000 5000 17000 7000 Answer: d) After EMV calculation, $7000 is required as contingency fund. 66 . Which of the following is the output of qualitative analysis process? Probability of reaching project objectives Project document updates Risk response Risk contingency reserve Answer: b) The output of qualitative risk analysis is project document update with numerically assigning values to the project objectives about overall impact. 67 . During execution, a major problem occurred that was not included in the risk response plan. What should you do FIRST? Create a workaround Re-evaluate the risk identification process Look for any unexpected effects of the problem Tell management Answer: a) Work around is the immediate solution and may not be permanent solution.
68 . Risk related contractual decisions is used when created in which of the following plans? Risk Register Procurement management plan Risk Management Plan Stakeholder register Answer: b) Contract which is the input for procurement management plan. 69 . The project manager has just found an unidentified risk which requires workaround. The project manager is working for weak matrix organization. Who approves this workaround? Functional Manager Customer Project Manager Sponsor Answer: a) In the weak matrix the FM is having highest authority. 70 . Which of the following risk responses guide that the project plan will not be changed to deal with the risk? Exploitation Transference Acceptance Mitigation Answer: c) Acceptance is the response in which no action will be taken. Based on the opportunity or threat, the other responses will be considered. 71 . What will you need as inputs for the qualitative risk analysis of the project in this scenario? Qualitative risk analysis does not happen through the project manager in a functional structure. You will need the risk register, risk management plan, scope baseline, and any relevant organizational process assets. You will need the risk register, risk management plan, outputs of qualitative risk analysis, and any relevant organizational process assets. You will need the risk register, risk management plan, permission from the functional manager, and any relevant organizational process assets. Answer: b) The listed one are inputs. Please refer to PMBOK.
72 . On which of the following processes does The Project Risk Management knowledge area focuses? Quantitative Risk Analysis Risk Monitoring and Control Potential Risk Monitoring Risk Management Planning Answer: c) Except for C rest of them are processes of risk management. 73 . You and the project team are assessing the risk events and creating a probability and impact matrix for the identified risks. Which one of the following statements best describes the requirements for the data type used in qualitative risk analysis? A qualitative risk analysis requires fast and simple data to complete the analysis. A qualitative risk analysis requires accurate and unbiased data if it is to be credible. A qualitative risk analysis encourages biased data to reveal risk tolerances. A qualitative risk analysis required unbiased stakeholders with biased risk tolerances. Answer: b) Any analysis should be accurate and unbiased and should be from the project interest. 74 . Which is the best technique to identify the risk in a project which provides four different perspective? Root cause analysis SWOT analysis Influence diagramming techniques Assumptions analysis Answer: b) Strength, weakness, opportunity and threat of the project and organization which helps in identification of risks. 75 . You have declined a proposed change request because of the risk associated with it. Where should the declined change request be documented and stored? Change request log Lessons learned Project archives Project document updates Answer: a) The change request log should carry the outcome of change request.
76 . Project manager wants to apply risk rating rule. Which of the following provides the same information? Risk management plan Organizational process assets Enterprise environmental factors Risk probability and impact matrix Answer: b) Risk ratings like low, medium, high definitions can be obtained from OPA. 77 . In which process do you create the Risk Breakdown Structure? Identify Risks Plan Risk Responses Perform Qualitative Analysis Plan Risk Management Answer: d) The RBS is part of the Risk Management Plan. It's structured very similarly to an WBS. The RBS helps you to see how risks fit into categories so you can organize your risk analysis and response planning. 78 . You are working with project team to plan the risk responses for their project. A project team member, does not understand the process that you are using to plan the risk responses. Which approach is the preferred method to address project risks and the risk responses? Risks in the project should be addressed by their probability for creating risk responses. Risks in the project should be addressed by the organization's risk tolerance for creating risk responses. Risks in the project should be addressed by their impact for creating risk responses. Risks in the project should be addressed by their priority for creating risk responses. Answer: d) The risk addressing happens based on the priority.
79 . You are budgeting for a project and while interacting with one of the stakeholders, he provides a statement saying that inflate the budget about 25% and asks you to consider the pessimistic estimation. You understood from this conversation that he is referring to the risk. But as a project manager what is the best you can do? Add the 30% as a lump sum contingency fund to handle project risks Add the 30% to your cost estimate by spreading it evenly across all project tasks Create one cost baseline for budget allocation and a second one for the actual project plan Ask for information on risks that would cause your estimate to be too small Answer: d) Instead of taking open statement as it, go to the detailing of risk that could make you to estimate which may result in lessor additional amount of the budget. 80 . Which of the following is the output of control risk process? Quantitative risk analysis Risk audits Change request Qualitative risk analysis Answer: c) Change request will be the output of monitoring and control risk. 81 . You have identified the risk and carried out the risk analysis. What should be the next process from risk management point of view? Qualitative risk analysis Control risk Risk identification Quantitative risk analysis Answer: b) Control risk which is monitoring and controlling process groups takes care of it. 82 . You are the project manager of a construction project. You have completed the risk response planning with your project team and ready to update the risk register to reflect the risk response. Which of the following statements best describes the level of detail you should include with the risk responses which has been created? The level of detail is set by historical information. The level of detail should correspond with the priority of the risk. The level of detail must define exactly the risk response for each identified risk. The level of detail is set of project risk governance. Answer: c) Change request will be the output of monitoring and control risk.
83 . You are a project manager working on a software development project. You have developed the risk management plan, identified risks, and determined risk responses for the risks. One of the risks you identified occurs, and you implement the response for that risk. Then, another risk occurs as a result of the response you implemented. What type of risk is this called? Trigger risk Residual risk Secondary risk Mitigated risk Answer: c) Secondary risks occur as a result of the implementation of a response to another risk. 84 . You are determining which risks can affect the project. Which of the following are the inputs to the identify risks process that you will use to accomplish the task? Each correct answer represents a complete solution. Choose that will not apply. Scope baseline Activity cost estimates Risk register Risk management plan Answer: c) Risk register is the output. 85 . You are working with the project stakeholders to begin the qualitative risk analysis process. You will need all of the following as inputs to the qualitative risk analysis process except for which one? Stakeholder register Project scope statement Risk management plan Risk register Answer: a) Stakeholder register is the output of identify stakeholder process. 86 . Which of the following option is true regarding stakeholder engagement level? Possessive, resistant, neutral, supportive and leading Unaware, resistant, neutral, supportive and leading Unaware, resistant, natural, supportive and leading Unaware, resistant, neutral, supportive and mentor Answer: b) Unaware, resistant, neutral, supportive and leading are the different stakeholder levels
87 . As a project manager you are collecting information on risks secretly. Which of the following techniques, you are using? Brainstorming Delphi Technique Interviews SWOT Analysis Answer: b) The Delphi technique is a way to get opinions and ideas from experts. This is a technique that uses a facilitator who uses questionnaires to ask experts about important project risks. They take those answers and circulate them - but each expert is kept anonymous so they can give honest feedback.. 88 . You have a list of risks in the risk register. While reassessing the list of risk, you come to the conclusion that some of the risk will not materialize. What would you do with these risks? Add the risks to the risk register Add the risks to a low-priority watchlist Close the outdated risks Add the risk to the issues log Answer: c) So, the risk is coming down. Close the one which is not happening. 89 . What is the other name for positive risks from the risk management books? Benefits Opportunities Ancillary constituent components Contingency risks Answer: b) When the risk is positive, it is an opportunity.
90 . You are the project manager on an industrial design project. You found a pattern of defects occurring in all projects over the past few years and think there might be a problem in the process the company is using. You start using Ishikawa diagrams to come up with the root cause for this trend over projects so that you can make recommendations for process changes to avoid this problem in the future. Which process are you doing? Perform Quality Planning Perform Quality Assurance Perform Quality Control Qualitative Risk Analysis Answer: b) He is doing root-cause analysis on process problems, that's Quality Assurance. Remember, Quality control is when you are trying to find problems in your work products through inspection. Quality Assurance is when you are looking at the way your process affects the quality of the work you are doing.. 91 . Monte Carlo simulation modeling is used for the developing the schedule and coming up with budget for the project. For the risk management under which process is it used? Risk Response Planning Quantitative Risk Analysis Risk Identification Qualitative Risk Analysis Answer: b) Monte Carlo analysis is a modeling and simulation technique that is a tool and technique of the Quantitative Risk Analysis process. 92 . PM, the project team, and the key project stakeholders have completed a round of qualitative risk analysis. PM needs to update the risk register with his findings so that he can communicate the risk results to the project stakeholders including management. Expect for which one will PM need to update all of the following information? Prioritized list of quantified risks Watchlist of low-priority risks Trends in qualitative risk analysis Risks grouped by categories Answer: a) Prioritization happens during the beginning of qualitative risk analysis.
93 . As a part of Control risk process, the project manager should update the risk register with information on risk reassessment, risk audits, and periodic risk reviews. What else can be updated in the risk register? Actual costs and schedule delays of risk events. Actual outcomes of risk management duties by the project team. Actual cost of risk events. Actual outcomes of the project's risks and of the risk responses. Answer: d) The outcome which can impact the project objectives and the risk response to overcome. 94 . Your team has utilized all of the appropriate tools and techniques for responding to identified project risks and has discovered that some risks have been reduced in impact but remain a potential threat. These risks require further monitoring and are referred to as: Secondary risks Primary risks Cumulative risks Residual risks Answer: d) Residual risks are included in the outputs of the Plan Risk Responses process and are expected to remain as threats. Their probability and impact have been reduced through mitigation. Primary risks are included in the initial risk identification process are generally most obvious. Secondary risks are those risks that result from the decisions about how to manage primary risks. Cumulative risk is a combination or collective expected value of the effect of multiple risks. 95 . You are the project manager of a large, high-profile project in your organization. You have realized that politics within your company may affect the true identification of risk events within the project. You decide that you'd like to use a method to identify risk events through an anonymous process. Which one of the following risk events will allow you to collect and distribute risk information without the stakeholders knowing what other stakeholders are communicating about the project risk events ? Surveys Monte Carlo Technique Checklist analysis Delphi Technique Answer: d) Delphi technique is used to identify and manage risks in an anonymous way in such a political environment.
96 . All of the following statements are true regarding risks except for which one? Risks might be threats to the objectives of the project. Risks are certain events that may be threats or opportunities to the objectives of the project. Risks might be opportunities to the objectives of the project. Risks have causes and consequences. Answer: b) Risks are uncertain events that may be threats or opportunities to the objectives of the project.. 97 . You are working on a project. A risk is identified because you don't have expertize to carry out the activity. You decided to outsource it, but the supplier is asking for the price which exceeds the budget. What is this risk called? Internal Secondary risk Pure risk Transference Answer: b) Secondary risk is nothing but risk which arises out of primary risk. 98 . Your current project has 75 internal stakeholders and 245 external stakeholders. Many of the risks within your project will only affect the internal stakeholders, but several of the identified risk events will affect the external stakeholders. Management would like to know the total number of communication channels in the project. How many communication channels exist in this project? 245 51040 102080 320 Answer: b) Use the formula n(n-1)/2= 320(319)/2=51040.
99 . You have just been appointed project manager for a new telecommunications project. There appear to be many risks on this project, but no one has evaluated them to assess the range of possible project outcomes. What needs to be done? Risk identification Risk quantification Risk response planning Risk monitoring and control Answer: a) Risk identification to minimize missing out any unidentified risk. 100 . Which of the following techniques examine the degree to which the organizational strengths offset opportunity and threat while looking into risk? SWOT Analysis Expert Judgment Delphi Brainstorming Answer: a) Strength, Weakness, opportunity and Threat analysis provides the organization assets. 101 . You are the project manager of a new project that uses newly released technology and there's relatively little information about the technology. Though the initial testing looks promising, there's still uncertainty regarding the reliability of the technology. You need to document this aspect of technology risk. Which of the following documents would she use to document the risk, so that she can track and respond to the risk? Project Charter Project Scope Statement Risk Management Plan Risk Register Answer: d) Risk register documents description, category, response, probability, impact, etc.
102 . You are actively communicating and working with the project stakeholders. One of the outputs of the Manage Stakeholder Expectations process can create new risks for the project. Which output of the Manage Stakeholder Expectations process can create risks? Change Requests Project Document Updates Project Management Plan Updates Process Assets Updates Answer: a) Change request in any one parameter may increases impact on other parameters of the project and may result in uncertainty. 103 . You would like to utilize sensitivity analysis in your project, but the management does not understand how this will be displayed. What type of chart is usually used with sensitivity analysis to show the relative effect of risks on the project? Ishikawa chart Force field analysis chart GERT Chart Tornado diagram Answer: d) Tornado diagram is a horizontal bar chart starts with high and then descends to low which looks like tornado. 104 . You are managing a construction project. During your risk identification interviews you learn that there has been a string of construction site thefts over the past few months in the area where you will be building your project. The team agrees that it's unlikely people will be able to steal from your site. Even if thieves could get around your security, it's even more unlikely that your project will lose a significant amount of material if a theft does occur. You decide to monitor the risk from time to time to be sure that it continues to have a low probability and impact. Where do you record the risk so that you don't lose track of it? In a trigger On a watchlist In the Probability and Impact Matrix In the Monte Carlo analysis report Answer: b) A watchlist is where you keep risks that don't have a high enough probability or impact to make it into the risk register but still need to be monitored. By recording the risk in a watchlist, you will have a reminder to check to be sure that circumstances haven't changed as your project goes on. That should give you enough time to come up with a risk response strategy if circumstances change as time goes on.
105 . You are the project manager working with your project team and other key stakeholders to identify the risks within the project. You are currently aiming to create a comprehensive list of project risks. For that you are using a facilitator to help generate ideas about project risks. What risk identification method is the project manager likely to use? Brainstorming Delphi Techniques Checklist analysis Expert judgment Answer: a) Brainstorming is the most commonly used technique to identify the risk. 106 . What is the reason behind updating work breakdown structure after the risk response decision? Because of work that was omitted during the WBS creation Because of new work generated by the risk responses Because of risk responses that are now activities Because of risks associated with work packages Answer: b) After the risk response new work package might be generated and should be included as part of WBS and later into network diagram. 107 . Two team members are arguing over who was responsible for distributing the risk status. Where should they look to clarify the responsibility? Communication management plan Procurement Management plan Risk register Risk Management plan Answer: a) Communication management plan provides the stakeholder responsibility. 108 . Your project requires that you install 190 computers. The vendor offers you a 15% discount on the basic software if your company will purchase 200 or more computers. You communicate this offer with other functions within the organization so that your project can save significant amount of funds. What is this risk response called? Exploiting Avoidance Sharing Transference Answer: c) Sharing is the opportunity and is opposite to transfer.
109 . You have identified a risk earlier in the project and accepted it. While monitoring the project, the risk occurred. Which of the following documents helps in taking further action? Risk Response Plan Fallback Plan Mitigation Plan Risk Register Answer: a) The risk response plan communicates how specific risks will be dealt with and the action steps that are required to carry them out. 110 . You are the project manager of a large construction project. Part of the project involves the electrical cabling work in the building your project is creating. You and the project team decide that the cabling work is too dangerous so you hire an experienced electrician to perform the work for the project. What type of risk response is this an example of? Acceptance Mitigation Transference Avoidance Answer: c) Transfer is the negative risk response used for shifting the activities in which the project team members do not have expertise. 111 . You are in the middle of the project and while collecting the information as part of earned value management, you find that CPI is 0.74. What you do to make CPI as 1? Reduce a test cycle, in the System Testing phase Reduce scope by cutting down non- essential features Add more resources to expedite the schedule Revisit estimates and eliminate risks; re- estimate Answer: d) Option (c) wouldn't reduce cost. Option (a) and (b) would always have a negative effect as they compromise on quality or scope. Of all the available option's (d) is the one with the minimum negative effect..
112 . While executing the project, risk trigger was identified. The project manager responds to this with contingency plan which proved to be ineffective. One of the stakeholders is not happy with this and escalates about his dissatisfaction with risk management team. What should the project manager do? Make sure stakeholders are aware that risk management team performs a high level Inform project sponsor, since it is his job to manage the stakeholder Ask to meet with the stakeholder in person to clarify the situation Inform PMO, that stakeholder behavior is affecting the project team morale. Answer: c) The PM should first speak to the stakeholder and then can interact with PMO. 113 . Over lunch with another project manager, you discuss ways to identify risks on your project. The next day, the other project manager sends you risk identification software created by her company with a copyright date of 1998. What should you do? Find out if using an old format would be acceptable Obtain approval from your legal department Share some of your templates with her to improve her company's abilities Send the software back Answer: d) It's the code of ethics where you need to maintain integrity and confidentiality. 114 . You are a project manager working on a compliance project in a banking firm. The project is scheduled to complete six weeks from now. Your sponsor tells you that if the project is finished sooner, the company can get some monetary incentives offered by the government. Deciding to fast track the project, would have what effect? Increase risk in the project Not affect the project risk Decrease risk in the project Cannot be determined Answer: a) Fast-tracking is the process of rescheduling tasks to be performed in parallel that were originally planned in series. Remember, fast-tracking always involves risk that could lead to increased cost and rework later..
115 . Which of the following is NOT a tool in Identify Risks? Brainstorming Risk Urgency Assessment Delphi technique SWOT Analysis Answer: b) A Risk Urgency Assessment is a tool of Qualitative Analysis. Risk Identification is all about finding risks. Qualitative Analysis is about ranking them based on what your team thinks their impact and probability will be for your project. (Quantitative Analysis, on the other hand, is about getting the numbers to back up your opinions). 116 . Your team is developing a risk management plan. Which tool and technique of this process is used to develop risk cost elements and schedule activities that will be included in the project budget and schedule? Planning meetings and analysis Strategies for both threats and opportunities Information gathering techniques Risk data quality assessment Answer: a) Planning meetings and analysis is the only tool and technique of the Risk Management Planning Process. 117 . Which of the following inputs provide information to compare the actual technical accomplishments during project execution to the project's planned schedule of technical achievements? Work performance information Variance and trend analysis risk register forecasting Answer: a) work information provides the information about the comparison.
118 . You are preparing for the risk identification process. You will need to involve several of the project's key stakeholders to help you identify and communicate the identified risk events. You will also need several documents to help you and the stakeholders identify the risk events. Which one of the following is NOT a document that will help you identify and communicate risks within the project? Risk register Activity cost estimates Stakeholder register Activity duration estimates Answer: a) Risk register captures all the risks and should be communicated to stakeholder. 119 . All of the following are tools and techniques for risk identification except: Monte Carlo simulation Interviewing SWOT analysis Delphi technique Answer: a) Monte Carlo simulation is associated with Quantitative Risk Analysis and uses iterative simulations to determine project outcomes. 120 . You are managing a software engineering project, when two team members come to you with a conflict. The lead developer has identified an important project risk: you have a subcontractor that may not deliver on time. The team estimates that there is a 40% chance that the subcontractor will fail to deliver. If that happens, it will cost an additional $15,250 to pay your engineers to rewrite the work, and the delay will cost the company $20,000 in lost business. Another team member points out an opportunity to save money an another area to offset the risk. If an existing component can be adapted, it will save the project $4,500 in engineering costs. There is a 65% probability that the team can take advantage of that opportunity. What is the expected monetary value (EMV) of these two things? -14100 6100 -11175 $39, 750 Answer: c) To calculate the expected monetary value (EMV) of a set of risks and opportunities, multiply each probability by its total cost and add them together. In this question, the cost of the risk is -$15,250 + -$20,000 = -$35,250, so its EMV is 40% x -$35,250 = -$14,100. The value of the opportunity is $4,500 and its probability is 65%, so its EMV is 65% x $4,500 = $2,925. So the total EMV for the two is -$14,100 + $2,925 = -$11,175.Don't forget that the cost of a risk is negative, and the cost of an opportunity is positive.
121 . You are a project manager with a financial firm that has multinational dealings. You feel the financial meltdown in one of the client countries could affect your project adversely, so you want to hedge your risks. Although the probability of occurrence of the event is low, you are advised to play it safe. In terms of risk attitude, your organization could best be described as? Risk Seeker Risk Averse Risk Neutral Risk Mitigator Answer: b) Someone who doesn't want to take risk is called risk averse and this project manager seems to be part of such an organization. 122 . Which one of the following is NOT a tool or technique for the quantitative risk analysis process? Expert judgment Data gathering and representation techniques Organizational process assets Quantitative risk analysis and modeling techniques Answer: c) Organizational process assets will be used as input. 123 . You have created a contingency response that the cost performance index should be equal to or less than 0.8. From the earned value technique, your project shows EV as $9000, AC as $10000 and PV as $7200. Are you preferred to use contingency reserve? Yes as the CPI is -$1000 No as the CPI is 0.9 Yes as the CPI is -$2800 No as the CPI is 0.8 Answer: b) CPI=EV/AC= 9000/10000= 0.9 which is more than 0.8 and hence not using. 124 . Which of the following process is not mandate for short term project as per PMI? Risk Limitation Perform Qualitative Risk Analysis Identify Risk Perform Quantitative Risk Analysis Answer: d) Quantitative risk analysis is not mandate for short term projects.
125 . As you are executing your project, you are constantly checking your risk register to be sure that you have planned responses for all of your risks. At one of the team status meeting, you find that a lower priority risk has suddenly become more likely. Where do you keep information about low priority risks? Triggers The watchlist Risk Management Plan Qualitative analysis documents Answer: b) Sometimes you'll find that some risks have obviously low probability and impact, so you won't put them in your register. Instead, you can add them to a watchlist, which is just a list of risks that you don't want to forget about, but you don't need to track as closely. You'll check your watchlist from time to time to keep an eye on things. 126 . You are conducting a status meeting and monitoring your risk register when you discover a risk that remains even after you implement all of your response strategies. What kind of risk is this and what should you do about it? It's a secondary risk. You don't need to worry about it. It's a residual risk. You need to plan a response strategy for it. It's a residual risk. You don't need to plan a response strategy for it because you've already implemented all of the risk responses you can plan for. It's a contingency reserve. You should only use it if the first risk occurs Answer: c) Residual risks are risks that remain even after you have planned for and implemented all of your risk response strategies. They don't need any further analysis because you have already planned the most complete response strategy you know in dealing with the risk that came before them. 127 . You are working with management on defining a contingency reserve for your project. Currently the project is scheduled to last 18 months and it has a cost budget of $2.5 million. What two areas of the project can the contingency reserve address in regard to risk management? Quality and costs Cost and resource management Risk and project planning Costs and schedule Answer: d) Contingency reserve will take care of cost and time.
128 . One of the team members find risk management very difficult to manage. She asks you, a lead project manager, at what stage in the project will risk management become easier. What answer best resolves the difficulty of risk management practices and the efforts required? Risk management only becomes easier with practice Risk management only becomes easier when the project is in its closing stage Risk management only becomes easier when the project moves into project execution. Risk management is an iterative process and never becomes easier. Answer: a) Practice makes a man perfect. The same principle applies to risk management. 129 . You are working on a project which is in the development of a software. This software is in the new technology and after the development you know that there will be defects which may get delivered to the customer. If the customer reports these defects, rework will be required and will cost more to the organization as part of the operations. To reduce this overhead cost, you decide to take a proactive approach of introducing special testing task. But this will cost about increase in the project of about 15%, but overall the organization is able to save about 25% of the cost. What is this risk response called? Avoid Share Mitigate Transfer Answer: c) By having a testing team, you are mitigating the risk. 130 . What is the best a project manager can do after carrying out qualitative risk analysis? Choose the best option. Focus on near-term risks first. Create a risk breakdown structure and delegate the risk analysis to the appropriate project team members. Focus on high-priority risks. Analyze as many risks as possible regardless of who initiated the risk event. Answer: c) High priority risks will be first priority.
131 . Purchasing insurance is considered an example of risk: Mitigation Transfer Acceptance Avoidance Answer: b) Transfer generally involves the shifting of a risk from one party to another. It does not illuminate or reduce the risk. Insurance is a common form of transfer of risk. 132 . A Project manager is in the planning stage. In the first planning meeting, the project manager has begun the initial process of finding the risk tolerance levels and attitudes of the stakeholders. Which of the following provides good platform for the project manager to start this step? Organizational process asset Project scope statement Project Charter Enterprise environmental factor Answer: d) Enterprise environmental factors provides the risk tolerance levels. 133 . You are a managing a project and outsourced some of the work to contractors. In the status meeting with the contractor, you sensed that there can be delay from the contractor's deliverable or in the extreme conditions, he may not deliver the work packages at all. To overcome this risk, you formed a team with some experts who can work on those work packages in case the contractor fails to deliver. What is the risk response plan here? Transference Mitigation Avoidance Acceptance Answer: b) Risk mitigation means taking some sort of action that will cause a risk, if it materializes, to do as little damage to your project as possible. Having team members spend time doing work to prepare for the risk is a good example of risk mitigation.
134 . What is salience model which helps in identifying risks from different stakeholders? Influence/impact grid, grouping the stakeholders based on their active involvement ('influence') in the project and their ability to affect changes to the project's planning or execution ('impact'). Grouping the stakeholders based on their level of authority ('power') and their active involvement ('influence') in the project. Grouping the stakeholders based on their level of authority ('power') and their level or concern ('interest') regarding the project outcomes. Describing classes of stakeholders based on their power (ability to impose their will), urgency (need for immediate attention), and legitimacy (their involvement is appropriate). Answer: d) Stakeholder analysis helps in identifying stakeholder's interest, impact, expectation, power. 135 . With regards to control risk, which of the following statement is not true? Risk identification and monitoring should occur throughout the life of the project. Risk audits should occur throughout the life of the project and are specifically interested in measuring the team's performance in the Risk Identification and Risk Monitoring and Control processes. Risks should be monitored for their status and to determine whether the impact to the objectives have changed Technical performance measurement variances may indicate that a risk is looming and should be reviewed at status meetings. Answer: b) Risk audits should be performed throughout the life of the project and are specifically interested in looking at the implementation and effectiveness of risk strategies. 136 . You are the project manager in company XYZ. You have been asked to create a proposal for a construction project for a client. While studying the relevant details, you realize that there are several requirements within the SOW and RFP provided by the client that would eliminate XYZ from bidding on the construction project. You propose to management to allow XYZ to create a partnership with a competitor GFK so that together they could bid on the construction project and qualify for the customer's requirements. What risk response are you proposing to management? Exploiting Teaming agreement Transference Sharing Answer: d) Sharing is a positive risk response often seen through partnerships and teaming agreements to seize an opportunity. Sharing response is where two or more entities share a positive risk. Risk sharing deals with sharing of responsibility and accountability with others to facilitate the team with the best chance of seizing the opportunity. Teaming agreements are good example of sharing the reward that comes from the risk of the opportunity.
137 . You hired a contractor to complete a portion of your project work. The contract used was a cost-plus contract. If you were to perform a risk audit, who would carry the risk in this scenario? You would because you are the project manager. Contractor would because of the contract type. You would because of the contract type. Contractor would because he is the hired contractor. Answer: c) The buyer carries the risk in case of cost reimbursable type of contract. 138 . Defining ------------- will provide a structure for systematically identifying risks to a consistent level of detail during the project planning process. The areas defined in this process should reflect common sources of risk for the industry or application area. Assumptions Constraints The product description Risk categories Answer: d) Assumptions are information items that should be verified. They are not generally considered to be based on factual data. Constraints are limitations that should be considered when developing project plans. The product description provides details about the complexity of the product to be delivered. Risk categories assist is detailed risk identification and may be utilized with a Risk Breakdown Structure (RBS). 139 . You are communicating to the stakeholders about the project status showing there is a delay in the project. You decide to carry out fast tracking as part of schedule compression in collaboration with stakeholder agreement. What is the impact of this technique? Costs Quality control concerns Human resource needs Risks Answer: d) Fast Tracking makes the project riskier.
140 . The project is scheduled to last for 18 months. Management asks PM how often the project team is participating in risk reassessment in this project. What should PM tell the management if he is following the best practices for risk management? Project risk management is scheduled for every month in the 18-month project. Project risk management has been concluded with the project planning. At every status meeting of the project team, project risk management is an agenda item. Project risk management happens at every milestone. Answer: c) Risk management should happen throughout the project and the best practice is to have during status meeting. 141 . You are working with his project team to plan the risk responses for a Project. You would like the project team to work together on establishing risk thresholds in the project. What is the purpose of a risk threshold? It helps to identify those risks for which specific responses are needed It is a limit of the funds that can be assigned to risk events. It is a warning sign that a risk event is going to happen. It is a study of the organization's risk tolerance. Answer: a) Every organization defines the risk threshold so that it can take appropriate action based on the trigger points. 142 . You and the project team have created risk responses for many of the risk events in the project. Where should you document the proposed responses and the current status of all identified risks? Stakeholder management strategy Risk management plan Risk register Lessons learned documentation Answer: c) Risk register is the document in which all the risks will be entered.. 143 . Choose the incorrect statement: Probability for success is greatest in the project Closing processes. The project manager's influence is greatest in the project Closing processes. The stakeholders' influence is least in the project Closing processes. Risk is greatest in the project Closing processes. Answer: d) Risk is lowest during the Closing processes because you've completed the work of the project at this point.
144 . You are working in a project and identified some risks related to procurement. You identified the procurement manager as a person who is empowered with a risk response and will control all aspects of the identified risk response in which a particular risk event will happen within the project. What title, in regard to risk, is bestowed on procurement manager? Risk expeditor Risk owner Risk team leader Risk coordinator Answer: b) Risk owner is the one who monitors and ensures that risk response being implemented.. 145 . You are the project manager of a Project and there's a risk that your team has identified, which could cause the project to be delayed by more than a month. You don't want this risk event to happen so you devise extra project activities. The extra steps, however, will cost the project an additional $10,000. What type of risk response is this approach? Enhancing Exploiting Mitigation Transference Answer: c) Mitigation is reducing the impact for the project deliverables. 146 . You are a project manager in a financial firm with multinational dealings. You feel the financial meltdown in one of the client's countries could affect your project adversely and you want to hedge your risks. Although the probability of occurrence of the event is low, you are advised to play it safe. In terms of risk attitude, your organization could best be described as? Risk Seeker Risk Averse Risk Neutral Risk Mitigator Answer: b) Someone who doesn't want to take risks is called risk averse and the project manager seems to be part of such an organization. Option (c) risk neutral describes a person/or an organization which is indifferent to the risk and option (a) risk seeker suggests an aptitude to take risks with an opportunity for higher returns. Option (d) risk mitigation is a risk response strategy and is an invalid choice.
147 . Sensitivity analysis is a technique for systematically changing parameters in a model to determine the effects of such changes and is useful for computer modelers for a range of purposes. Which of the following options will not be useful to meet the purpose of sensitivity analysis? Increased understanding or quantification of the system Estimating the average outcome Model development Decision making or the development of recommendations for decision makers Answer: b) Average outcome is not a good technique. All remaining choices are good for sensitivity analysis. 148 . Using the following information and a normal distribution curve, what is the probability that the project will be completed in 64 days? Optimistic time is 48 days. Pessimistic time is 72 days. Most likely time is 60 days 0.16 0.84 0.5 1 Answer: b) To Determine the probability of completing in 64 days, the following steps are required: 1. Determine the weighted average using the formula {Optimistic + 4(Most Likely) + Pessimistic}/6. 2. Determine the standard deviation using the formula (Pessimistic - Optimistic) / 6. In the normal distribution curve there is a 68% probability that the outcome will be within 1 standard deviation from the mean. There is a 95% probability that the result will fall within 2 standard deviations from the mean and a 99.73% probability that the result will fall within 3 standard deviations from the mean. If the mean is at the 50% point and there is a 68% probability of the result falling within plus or minus one standard deviation of the mean, then the probability of 1 standard deviation is divided by 2. The result is 34. Adding 34 to 50% = 84%. Subtracting 34 from 50% = 16%. The Standard deviation in this example is 4. The mean is 60. 60 + 4 = 64 or one standard deviation from the mean. 50% + 34 = 84%. 149 . Which of the following is NOT a tool or technique of Control Risks? Bringing in an outside party to review your risk response strategies Revisiting your risk register to review and reassess risks Using Earned Value analysis to find variances that point to potential project problems Gathering information about how the work is being performed Answer: d) When do you gather work performance information? You do it when you're reporting on the performance of the team - that's why it's a tool and technique of the Report Performance process. But that's not something you do during Monitor and Control Risks - Work Performance Information is an input to that process, which means it needs to be gathered BEFORE you start monitoring and controlling your risks. Some questions on the PMP exam will describe tools or techniques rather than using their names. A question might say 'bringing in an outside party to review your risk response strategies' instead of 'Risk Audit'. You're actually asked about concepts you've learned, not just about a bunch of things you've memorized.
150 . When you are working on a project to mitigate the risk you decide to use compression technique. Which of the following technique calls for updating HR management plan? Teaming agreements Transference Crashing the project Fast tracking the project Answer: c) Crashing adds to resources which in turn leads to updating of HR plan. 151 . You are working with your project team to begin identifying risks for the project. As part of your preparation for identifying the risks within the project you will need many inputs for the process. Which one of the following is NOT an input to the risk identification process? Quality management plan Cost management plan Stakeholder register Procurement management plan Answer: d) Procurement management plan is not an input for identify risk process. 152 . What is the EMV for a risk which is threat with probability of 40% and impact of $7000? Negative $2800 Negative $67,000 Zero - the risk event has not yet occurred 27000 Answer: a) EMV= 40% * $7000=$2800 and is negative as it will cost to the project.
153 . You are asked to identify risk events within the project. You would first like to examine the project documents including the plans, assumptions lists, project files and contracts. What key thing will help you to discover risks within the review of the project documents? The project documents will help the project manager to identify what risk identification approach is best to pursue. Lack of consistency between the plans and the project requirements and assumptions can be the indicators of risk in the project. Poorly written requirements will reveal inconsistencies in the project plans and documents. Plans that have loose definitions of terms and disconnected approaches will reveal risks. Answer: b) The variation from the expected can result in risk in the project. 154 . Qualitative risk analysis uses lot of tools and techniques. Which is not one of them? Risk urgency assessment Expected monetary value analysis Probability and impact matrix Risk categorization Answer: b) Qualitative Risk Analysis is all about figuring out prioritizing each risk, and figuring out its probability and impact. It's an important part of risk planning. But it's not about coming up with specific numbers! That's what Quantitative Risk Analysis is for - and EMV analysis is part of Quantitative (not Qualitative) analysis, because it's where you assign numeric values to risks. 155 . What is pure risk? It is a risk event that is generated due to errors or omission in the project work. It is a risk event that is created by a risk response. It is a risk event that only has a negative side, such as loss of life It is a risk event that cannot be avoided because of the order of work. Answer: c) Pure risk is always negative and should come out of that. 156 . You are preparing to plan risk responses for your project with your project team. How many risk responses are available for a positive risk event in the project? Three Four Seven One Answer: b) Both positive and negative carries 4 responses.
157 . Why the qualitative risk analysis should be carried out? It is a cost-effective means of establishing probability and impact for the project risks. Qualitative risk analysis helps segment the project risks, create a risk breakdown structure, and create fast and accurate risk responses. All risks must pass through quantitative risk analysis before qualitative risk analysis. It is a rapid and cost-effective means of establishing priorities for the plan risk responses and lays the foundation for quantitative analysis. Answer: d) Qualitative risk analysis helps in providing ranking after arriving at probability and impact. 158 . Identify Risk process determines the risks that affect the project and document their characteristics. Why should the project team members be involved in the Identify Risk process? They are the individuals that will need a sense of ownership and responsibility for the risk events. They are the individuals that will have the best responses for identified risks events within the project. They are the individuals that are most affected by the risk events. They are the individuals that will most likely cause and respond to the risk events. Answer: a) Please note that involve the team members for any planning activities.. 159 . You are conducting risk management meeting and identified a risk with low probability and less impact. What do you do with this risk? Risk alarm Watchlist Observation list Risk register Answer: b) Low risks and residual risks are kept under watchlist. 160 . The PM asked you to help him complete some probability distributions for his project. What portion of the project will you most likely use for probability distributions? Bias towards risk in new resources Risk probability and impact matrixes Risk identification Uncertainty in values such as duration of schedule activities Answer: d) Probability distribution provides the uncertainties in values like cost, time.
161 . Which of the following statement is true? The quantitative risk analysis process will review risk events for their probability and impact on the project objectives. The quantitative risk analysis seeks to determine the true cost of each identified risk event and the probability of each risk event to determine the risk exposure. The quantitative risk analysis process will analyze the effect of risk events that may substantially impact the project's competing demands. The quantitative risk analysis reviews the results of risk identification and prepares the project for risk response management. Answer: c) Quantitative risk analysis helps in numerically assigning the impact considering the overall project objectives. 162 . Which of the following is not an input for identifying stakeholders process? Project Charter Organizational process assets Project management plan Enterprise environmental factors Answer: c) Project management plan is developed as part of the planning whereas identifying stakeholders happens at the initiating process group. 163 . While addressing the root causes of the risks, you are using cause and effect diagram. But sponsor is not happy and advises you to use Ishikawa or fishbone diagram. To what conclusion will you come after analyzing this? It is a graphical representation of situations showing causal influences. It is the same thing as a root cause diagram. It shows how various elements of a system interrelate. It diagrams the risks according to the work breakdown structure including resources. Answer: b) The other name for cause and effect diagram is Ishikawa or fishbone diagram.. 164 . There are six inputs to the quantitative risk analysis process. Which one of the following is NOT an input to the perform quantitative risk analysis process? Enterprise environmental factors Risk management plan Cost management plan Scope Baseline Answer: d) Scope Baseline is not an input.
165 . You are working with the project team on the Perform Qualitative Risk Analysis process. You are having the project team to review the project scope statement as an input to the qualitative risk analysis process. Why? The project scope statement must be understood to see the project requirements and the inherent risks of the project. The project scope statement will reveal the type of project as either a recurrent or first-of-its- kind project. The project scope identifies the risks associated with project constraints. The project scope statement must be reviewed to understand the quality requirements and the risks associated with the demand for quality. Answer: b) Scope statement is about scope description, assumption, constraints, acceptance criteria, etc. 166 . Project risk is typically characterized by which three elements: Severity of impact, duration of impact and cost of impact Identification, type of risk category and probability of impact Risk event, risk probability and the amount at stake Occurrence, frequency and cost Answer: c) A risk event is the actual occurrence of the risk. Example-equipment failure. Risk probability is the likelihood that a risk event may occur. Amount at stake refers to the impact or consequence of the risk and is usually described in terms of the effect on cost or schedule 167 . You are coming up with risk responses plan. You realized that if any unknown risk materializes, you need to park some money for the same. For this you refer to historical data and come up with some figure of how much should be parked. What is this called? General contingency to try to compensate Document the unknown risk items and calculate the expected monetary value based on probability and impact that result from the occurrence Determine the unknown risk events and the associated cost, then add the cost to the project budget as reserves Add a 10% contingency Answer: a) The past experience or the historical data helps in contingency planning.
168 . In what portion of a project are risk and opportunities greatest and require intense planning and anticipation of risk events? Closing Planning Initiating Executing Answer: c) Risk will be highest during the initial stages and should come down as the project progresses. 169 . Your organization is running a project with budget of $X. You already progressed about 80% of the work and come to know that a new law is being implemented which may affect the project. What is the best response you can take at this point of time? Acceptance Transference Mitigation Enhance Answer: a) The organization has already invested so much. Better option is to proceed and see what happens which is nothing but acceptance of the risk. 170 . You and the project team are recreating a probability and impact matrix using RAG rating. There is some confusion and disagreement among the project team as to how a certain risk is important and priority for attention should be managed. Where can we determine the priority of a risk, given its probability and impact? Risk management plan Project sponsor Risk response plan Look-up table Answer: d) Look up table provides the weightage based on Probability and Impact.

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Risk 2 simplelearn-exam1-ans

  • 1.
    1 . APM has created a contingency response that the cost performance index should be less than 0.80. The project has a budget at completion of $100,000 and is 35 percent complete - though the project should be 50 percent complete. The project has spent $45000. What is the project's cost performance index? 1.28 0.7 0.77 1,42 Answer: c) CPI=EV/AC. EV=100000*35%=35000. AC= 45000. CPI=35000/45000=0.77. 2. Consider the risk probability-impact matrix in the figure given below: If Risk B happens in this project, how much will be left in the contingency reserve? 220000 -452500 It depends on the total budget of the project. -232500 Answer: a) The total EMV comes to 452500 and if B happens then the left out is $220000. 3 . You are managing the project along with key stakeholders. One of the key requirement from customer is their satisfaction and even the other stakeholders believe in this. As a project manager what do you think or is your action about this point from risk management point of view? Achieving customer satisfaction is an assumption and should be documented in the project scope. Achieving customer satisfaction is a subjective requirement and entails a high level of risk of being successfully accomplished Achieving customer satisfaction is a risk as the project manager cannot control how satisfied the customer will be with the project deliverables. Achieving customer satisfaction should always map to the quality requirements for the project. Answer: b) Customer satisfaction differs so is subjective.
  • 2.
    4 . Whichprocess performs the probability and impact analysis? A risk probability-impact matrix Quantitative risk analysis Seven risk responses Qualitative risk analysis Answer: d) After the identification risk, one should carry out the qualitative risk analysis. 5 . You are working to complete the qualitative risk analysis for your project. During the analysis you encourage the project team to begin the grouping of identified risks by common causes. What is the primary advantage to group risks by common causes during qualitative risk analysis? It helps the project team realize the areas of the project most laden with risks. It saves time by collecting the related resources, such as project team members, to analyze the risk events. It can lead to developing effective risk responses. It can lead to the creation of risk categories unique to each project. Answer: c) It helps in categorization and carrying out effective risk management. 6 . The project team is in the process of developing risk responses. While dealing with a particular risk, the team discover that it cannot be avoided and attempts to transfer or mitigate the risk is unsuccessful. What the team should do? Continue to investigate to find ways to transfer Accept the risk Reduce the project scope so that risk can be avoided Continue investigating ways to reduce the impact of the risk. Answer: b) Accept the risk, wait and watch.
  • 3.
    7 . Youare working on a mobile cell phone project which calls for erecting towers. While planning, you identified that there is a risk of erecting all the towers very late in the financial year which will affect the revenue growth of the organization. You decide to approach the competitors who already erected the towers and is in operation, to use their tower on revenue sharing model. Which of the following response is being taken to overcome the risk? Mitigate Share Exploit Enhance Answer: b) The project manager is asking the other companies to partner and they can all share in the benefits of it. 8 . Teaming agreement solution refers to which risk response? Transference Acceptance Mitigation Sharing Answer: d) As we know join venture for example is sharing the risk and considered an opportunity for all the parties. 9 . You are working with the project stakeholders on the qualitative risk analysis process in your project. You have used all the tools to the qualitative risk analysis process in your project. Which of the following techniques is NOT used as a tool in qualitative risk analysis process? Risk Urgency Assessment Risk Categorization Risk Reassessment Risk Data Quality Assessment Answer: c) Risk reassessment is used in control risk process.
  • 4.
    10 . Youare using the applications of IRGC model to understand and manage the rising of the overall risks that have impacts on the economy and society. One of your team member wants to know what is the need to use IRGC. What will be your reply? IRGC addresses questions such as the understanding of the secondary impacts of a risk. IRGC models aim at building robust, integrative inter-disciplinary governance models for emerging and existing risks. IRGC addresses the development of resilience and the capacity of organizations and people to face unavoidable risks. IRGC is both a concept and a tool. Answer: b) IRGC which is International Risk Governance Council model supports in building governance for the risk management. Please refer to www. Irgc. Org. 11 . You are the project manager of your organization. Your organization will receive a bonus if the project finishes before Christmas . The bonus amount is about $700,000. After assessing the situation considering the trend and the forecast, you realize that by spending about $200,000 with crashing technique, the goal can be achieved. What is the response you are taking here? Crashing can be a type of the enhancing risk response. Crashing can be considered transference because of the $275,000 is actually paid from the bonus, which is paid by the project customer. Crashing can be a type of the exploit risk response. Crashing is the addition of labor, not a risk response. Answer: a) It's motivation for the team and which results in enhancing the opportunity. 12 . You identified a supplier who can create stained glass windows for 1,000 window units in a construction project. The supplier is an artist who works by himself, but creates windows for several companies throughout the United States. Management reviews the proposal to use this supplier and while they agree that the supplier is talented, they do not think the artist can fulfill the 1,000 window units in time for the project's deadline. Management asked you to find a supplier who can fulfill the completion of the windows by the proposed date in the schedule. What risk response has management asked you to implement? Mitigation Acceptance Avoidance Transference Answer: a) Mitigation is used to reduce the impact on the project schedule.
  • 5.
    13 . Whileidentifying risks for a new construction project, you discover that a chemical you are using on your building cannot be applied in rainy conditions. You also learn that your project will be ready for the chemical application around the time when most of the rainfall happens in that part of the country. Since the project can't be delayed until after the rainy season and you need to make sure the building gets the chemical coating. You decide that your team will just have to work around the rain. Which strategy is this an example of? Mitigate Exploit Accept Transfer Answer: c) This is an example of accepting a risk. The team can't do anything about the weather, so the project manager has accepted the fact that they could end up being delayed by it. 14 . You are reviewing the risk register for your project. The risk register provides information to you, the project manager and to the project team during the risk response planning. All of the following are included in the risk register except for which option? Network diagram analysis of critical path activities Symptoms and warning signs of risks List of potential risk responses Trends in qualitative risk analysis results Answer: a) Schedule management plan provides the information about network diagram. 15 . Along with your team members you are facilitating about risk response analysis along with understanding of each response from the team point of view. Which of the following activities are you carrying out? Risk audits Stakeholder analysis as the project team is a stakeholder Risk identification with the project team Risk analysis Answer: a) Risk Audits helps in evaluate the effectiveness of risk response and the overall risk management.
  • 6.
    16 . Decisiontree can be classified as Expected monetary value Probabilistic outcome method Earned value method Modeling and simulation Answer: b) The decision tree is a diagram describing different decisions under consideration and the impact on the project of choosing one over the another. 17 . In which process does the tool Ishikawa or cause and effect diagram tool used? Identify Risks Qualitative Analysis Quality Control Plan Risk Responses Answer: a) Don't assume that every time you see a fishbone diagram the question is talking about Quality Control. Diagramming Techniques (including Ishikawa diagrams and Flowcharts) are a tool of the identify Risks process. You use them to find the root cause of defects in Quality Management processes but they can also be useful in finding the risks that can lead to trouble in Risk Management. 18 . The project team is in the process of performing qualitative risk analysis. All of the following updates will be included within the risk register updates except: List of risks requiring additional analysis List of low priority risks Probability of achieving time objectives Risks grouped by categories Answer: c) Probability of time objectives is included during plan risk response process. 19 . Which of the following will not increase the quality risk? Crashing Overlapping Fast tracking Concurrent Engineering Answer: a) Crashing adds to the cost risk.
  • 7.
    20 . Youand the project team have identified the risk that the project may not complete on time, as required by the management, due to the creation of the user guide for the software you're creating. You have elected to hire an external writer in order to satisfy the requirements and to alleviate the risk event. What type of risk response have you elected to use in this instance? Avoidance Exploiting Transference Sharing Answer: c) Transference is used to transfer the activities which is not of self expertise. 21 . You are the project manager for your company and a new change request has been approved for your project. This change request, however, has introduced several new risks to the project. You have communicated these risk events and the project stakeholders understand the possible effects these risks could have on your project. You are elected to create a mitigation response for the identified risk events. Where will you record the mitigation response? Risk register Risk log Risk management plan Project management plan Answer: a) The risk register should update with risk response. 22 . You are about to perform qualitative risk analysis on the identified risks within your project. Which one of the following will NOT help you to perform this project management activity? Scope baseline Risk management plan Risk register Stakeholder register Answer: d) Stakeholder register is the output of identify stakeholder process.
  • 8.
    23 . Whichrisk response indicates the allocation of ownership of opportunity to third party? Share Exploit Enhance Venture Answer: a) Share is joint ownership. 24 . Once the risks have been identified on the project, the next step is to manage the risks. Of the following, which is not a suitable way of managing the risks? By using existing assets By contingency planning By investing in new resources By Brainstorming Answer: d) Brainstorming is a tool and technique for risk identification. All of the other options are ways of managing the risks. Existing assets may involve improvements to existing methods and systems, changes in responsibility, etc. Contingency planning may help you in minimizing the effect, if it happens. Investing in new resources may help in reducing or insuring you against risk. 25 . Communication management plan contains all of the following except: Risk reporting formats Escalation process of issues Communication related terms Frequency of communication Answer: a) Risk reporting format is included as part of risk management plan.
  • 9.
    26 . Whatare the strategies for dealing with positive risks? Avoid, mitigate, transfer, accept Transfer, mitigate, avoid, exploit Exploit, share, enhance, accept Mitigate, enhance, exploit, accept Answer: c) Positive risks are opportunities that could happen on your project. The strategies for dealing with them are all about making sure that your project is in a position to take advantage of them or at least share in them with other projects if possible. 27 . The project has a budget of $567,000 and is schedule to last for three years. You want to examine the risk events to determine which risk events have the most potential impact on the project. Which modeling technique can help you to accomplish this goal? Expected monetary value Sensitivity analysis Quantitative risk analysis Modeling and simulation Answer: b) Sensitivity analysis determines which is having most impact with risk. 28 . All of the following statements are true regarding risk events except which one? Choose the least correct answer. Project risks are uncertain events. If risks occur, they can have a positive or negative effect on project objectives. Unknown risks are threats to the project objectives, and nothing can be done to plan for them. Risks that have more perceived rewards to the organization than the consequences of the risk should be accepted Answer: c) Unknown risks might be threats or opportunities to the project, and the project manager should set aside contingency reserves to deal with them.
  • 10.
    29 . Inaddition to monitoring and controlling the project risks for their status and information, the risk monitoring and controlling process accomplishes four key things for a project. Which one of the following is NOT a determination that is made by the risk monitoring and controlling process? Determines if the project assumptions are still valid Determines if the risk management policies and procedures are being followed Determines if the risk contingency reserves should be modified so that it is aligned with the current risk assessment Determines if the project constraints are still valid Answer: d) Choices A, B and C are the tools and techniques. 30 . All of the following are tools and techniques for Control Risks except: Earned value analysis Project risk audits Technical performance measurements Exploitation Answer: d) Exploit is a strategy for opportunities under the tools and techniques of the Plan Risk Responses process. It is associated with managing opportunity or risks that may have a positive impact on a project.. 31 . You are the project manager of a project that has recently finished the final project deliverables. The project customer has signed off on the project deliverable and you have a few administrative closure activities to complete. In the project, there were several large risks that could have wrecked the project but you and your project team found some creative methods to resolve the risks without affecting the project costs or project end date. What should you do with the risk responses identified during the project's monitoring and controlling process? Include the risk response in the project risk management plan. Include the responses in the project management plan. Nothing. The risk responses are included in the project's risk register already. Include the risk responses in the organization's lessons learned database. Answer: d) Lessons learnt is one of the important organization assets.
  • 11.
    32 . Asa project manager you decide to create an issue log which captures issue description, owner, and the target date for issue closure. All of the following are common examples of issues in the project except? Differences in Opinion Probable delay in the next delivery Pending root cause analysis Delay in receiving feedback from the customer Answer: b) Probable delay in the next delivery represents a project risk and is not an issue as the event is uncertain. This may or may not happen in future. 33 . Which diagramming technique are you using as a part of the risk identification process that helps in finding the causes of the issues? Cause and effect diagrams System or process flow charts Predecessor and successor diagramming Influence diagrams Answer: a) Cause and effect diagram used to find the causes of the defects. 34 . Which process addresses if any changes are to be implemented after risk analysis, the same is carried in controlled manner? Risk monitoring and control Scope change control Integrated change control Configuration management Answer: c) Change Control Board addresses all the changes through integrated change control process.
  • 12.
    35 . Asa project manager you are working with stakeholder to assess the qualitative and quantitative risk analysis. What is the best course of action when dealing with bias and attitude of the stakeholders considering risk management? Evaluate and document the bias towards the risk events Evaluate the bias through SWOT for true analysis of the risk events Document the bias for the risk events and communicate the bias with management Evaluate the bias towards the risk events and correct the assessment accordingly Answer: d) There should not be any bias during the risk management. 36 . All are inputs to Plan stakeholder management except for: Organization process assets Stakeholder register Risk Register Stakeholder management strategy Answer: c) Risk register is not an input. 37 . In a project there are certain enterprise environmental factors that require PM to use modeling and simulation techniques to predict the likelihood of achieving cost and schedule objectives in the project. PM is using a technique for which the cost estimates are chosen at random for each iteration of the analysis, such as pessimistic, most likely, and worst-case scenarios. What type of analysis is PM using in this project? Quantitative analysis Qualitative analysis Risk distribution Monte Carlo Analysis Answer: d) Monte Carlo analysis helps in carrying out quantitative risk analysis.
  • 13.
    38 . Youare in the middle of the project and one of the key stakeholder comes up with a change request. By looking into the change request, you realize that there will be an impact to the project from the schedule perspective, if this is implemented and also sure that because of the business advantage by this implementing this change, CCB is going to approve it. So considering the impact what is your first action? Mitigate the risk by asking a team member to get familiar with the feature of the software that might be changed Schedule a meeting with the stakeholder to discuss the risk Add the risk to the risk register and gather information about its probability and impact Add the risk to the issue log and revisit it when there is more information Answer: c) In the risk register enter the details and then go for the further analysis. 39 . Which of the following plan directs the process of quantitative risk analysis? Risk analysis plan Staffing management plan Human resource management plan Risk management plan Answer: d) Risk management plan guides the risk management. 40 . A project manager working on a construction project identifies a risk of a heavy storm in the coming months which might affect the construction activity. However, he doesn't have any reliable information on the weather forecast or the severity of the storm. In this case, what is the best project manager can do? Capture the Risk in the Risk Register Ignore the Risk as nothing can be done to avoid it Actively accept the risk and allocate time and cost reserve in contingency fund Proceed with Risk Response Strategy to counter the Risk Answer: c) In this situation the project manager has no information on the timing, anticipated frequency, or impact of the expected rough weather. Option (d) will not give any valuable information. The best option is (c) to accept the risk, but plan a contingency reserve in terms of cost and time in case the risk occurs. Option (a) and (b) are passive approach and are not recommended for a good project manager who should be always proactive in his approach towards risk management.
  • 14.
    41 . Youand project team have agreed that if the vendor is late by more than ten days they will cancel the order and hire another Company to fulfill the order. The new Company can guarantee orders within three days, but the costs of their products are significantly more expensive than the current vendor. What type of a response strategy is this? Internal risk management strategy Contingent response strategy External risk response Expert judgment Answer: b) Contingent response is plan B. 42 . All of the following are included in risk management plan except Contingency plan Approach to perform risk management activities Risk categories Estimated costs for risk activities Answer: a) Contingency plan will be done while carrying out the risk response process. 43 . You are managing a project which is very critical for the organization. But the key stakeholders are not attending the status and risk management meeting. What is this attributed as? Risk events Risk triggers Primary risks Residual risks Answer: b) A Risk trigger is referred to as a symptom of an impending risk event and signals the project manager to take action before the event occurs. Risk events are actual occurrences of an identified risk event. Primary and secondary risks are risk events identified by the project team or key stakeholders..
  • 15.
    44 . Youare the project manager managing a big team. During the risk management you carried out qualitative risk analysis and started quantitative risk analysis. One of the team members asked why you are carrying out quantitative risk analysis too? Which one of the following statements best defines what quantitative risk analysis is? Quantitative risk analysis is the process of numerically analyzing the effect of identified risks on overall project objectives. Quantitative risk analysis is the planning and quantification of risk responses based on probability and impact of each risk event. Quantitative risk analysis is the review of the risk events with the high probability and the highest impact on the project objectives. Quantitative risk analysis is the process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact. Answer: a) The definition of quantitative risk analysis is that it is the process of numerically analyzing the effect of identified risks on overall project objectives.. 45 . You added extra features to the project and this has introduced new risks to the project work. The project manager elects to remove the features that you added. The process of removing the extra features to remove the risks is called? Preventive action Corrective action Scope creep Defect repair Answer: a) Preventive action is to reduce and completely stop something negative that is happening to the project. 46 . You and your project team are just starting the risk identification activities for a project that is scheduled to last for 18 months. Your project team has already identified a long list of risks that need to be analyzed. How often should you and the project team do risk identification? It depends on how many risks are initially identified At least once per month Identify risks is an iterative process Several times until the project moves into execution Answer: c) Risk identification should happen throughout the project.
  • 16.
    47 . Forthe risk identification process, we are using Ishikawa diagram. All of the following statements are true except for: Ishikawa diagrams are also called cause-and-effect diagrams. Ishikawa diagrams are also called fishbone diagrams. Ishikawa diagrams are a tool and technique of this process. Ishikawa diagrams show the steps needed to identify the risk. Answer: d) Cause-and-effect diagrams-also called Ishikawa or fishbone diagrams-show the relationship between the effects of problems and their causes. Kaoru Ishikawa developed cause and - effect diagrams. 48 . You are the project manager for a new project using a technology that has recently been released. There is relatively little information available about this technology. Initial testing of the technology looks promising, but while tracking the project, you discovered that there's still uncertainty as to its longevity and reliability. You want to consider the technology factors a risk for your project. Where should you document the risks associated with this technology so that you can track the risk status and responses? Risk register Risk low-level watch list Project scope statement Project charter Answer: a) Risk register capture all the risks irrespective of its nature. 49 . What is a risk owner? The person who monitors the watchlist that contains the risk. The person who meets with stakeholders to explain the risk. The person who makes a risk happen. The person who is responsible for the response plan for the risk. Answer: d) Every risk should have a risk owner listed in the register. That person is responsible for keeping the response plan up to date and make sure the right actions are taken if the risk does occur.
  • 17.
    50 . Youhave been actively communicating and working with the project stakeholders. One of the outputs of the manage stakeholder expectations process can actually create new risk events in the project. Which output of the manage stakeholder expectations process create risks? Project document updates Change requests Organizational process assets updates Project management plan updates Answer: b) Change requests can impact other objectives in the project and can result in risk. 51 . Based on the enterprise environmental factors and the risk attitude of the stakeholders within the organization, what can be determined? Risk attitude can affect the measurement of probability and impact. Risk attitude can establish a stakeholder's influence over project decisions. Risk attitude identifies stakeholders that are hygiene seekers or motivation seekers. Risk attitude establishes stakeholders as positive or negative stakeholders. Answer: a) Risk appetite explains risk attitude which in turns provides probability and impact. The attitude can be organization and/or the individual. 52 . Which risk analysis tool is used to model your risks on a computer to show random probabilities? Computerized risk audit Monte Carlo analysis EMV analysis Delphi technique Answer: b) Monte Carlo analysis is a way of seeing what could happen to your project if probability and impact values changed randomly.
  • 18.
    53 . Youhave completed the risk analysis processes for the risk events. You and the project team have created risk responses for most of the identified project risks. Now, you would like to assign risk owners to the events. Which risk events should have risk response owners? Only the risks with a high risk rating Each agreed-to and funded risk response should have a risk response owner Each risk that has a risk response should have a risk response owner Only the risk events that are considered a negative risk event with a high risk rating Answer: b) Once the risk response decided, the risk owner should be identified. 54 . Which of the following is not a communication method while addressing stakeholders and communicating with them? Interactive method Push method Pull Method Direct method Answer: d) The three types of communication methods are interactive, push and pull methods. 55 . You are working with the project team members and two subject matter experts to assess the identified risk events in the project. Which of the following approaches is the best to assess the risk events in the project? Determination of the true cost of the risk event Probability and Impact Matrix Root cause analysis Interviews or meetings Answer: d) Interaction with SME's is the best option to assess the risk events.
  • 19.
    56 . Whichof the following technique helps in finding any risk associated with respect to schedule? Project network diagrams Process flow charts Ishikawa diagrams Influence diagrams Answer: a) Network diagram shows the risk if there is any delay in the activities which are in the critical path. 57 . What is the significance of earned value technique from the risk management perspective when carrying out the variance and trend analysis as part of monitoring and controlling? You can determine a true project completion date. You can track the cost and schedule variances. You can review quality performance on baselines. You can forecast deviation of the project cost and schedule for completion targets. Answer: d) EVM provides variance, forecasting and performance measurement of the project. 58 . Your project has several risks that may cause serious financial impact, if they happen. You have studied the risk events and made some potential risk responses for the risk events but management wants you to do more. They'd like you to create a type of chart that identified the risk probability and impact with a financial amount for each risk event. What is the likely outcome of creating this type of chart? Risk response Quantitative analysis Contingency reserve Risk response plan Answer: c) Contingency reserve will be considered after the analysis.
  • 20.
    59 . Therisk transference is referred to the transfer of risks to a third party, usually for a fee, it creates a contractual relationship for the third party to manage the risk on behalf of the performing organization. Which one of the following is NOT an example of the transference risk response? Use of insurance Warranties Life cycle costing Performance bonds Answer: c) Life cycle costing is not a contractual. 60 . The --------- is the risk or danger of an action or an event, a method or a (technical) process that still conceives these dangers even if all theoretically possible safety measures would be applied. Residual risk Secondary risk Primary risk Pure risk Answer: a) residual risk is the risk which remains after the all the responses implemented. 61 . Management has asked you to perform a risk audit and report the results. A project team member asks you what a risk audit is. What do you tell the team member? A risk audit is a review of all the risks that have yet to occur and what their probability of happening are. A risk audit is a review of the effectiveness of the risk responses in dealing with identified risks and their root causes, as well as the effectiveness of the risk management process. A risk audit is a review of all the risk probability and impact for the risks, which are still present in the project but which have not yet occurred A risk audit is an audit of all the risks that have occurred in the project and what their true impact on cost and time has been. Answer: b) Risk audit helps in overall effective risk management.
  • 21.
    62 . Youare selecting a project for your organization from different customers. You have delivered projects for these customers earlier. From the previous history data you know that after delivering the projects, the payment system is not good in spite of the delivery as per the scope requirements. You feel that this can be a risk. What is the best you can do? Transference Mitigation Avoidance Acceptance Answer: c) The best thing that you can do with a risk is avoid it. Sometimes avoiding one risk can lead to another risk like not getting any projects. But one has to balance. 63 . A project manager knows that managing the expectations of stakeholders helps to increase the probability of project success by ensuring that stakeholders understand the project benefits and risks. For this process, he could use all of the following tools and techniques except? Issue Log Communication methods Active listening Writing skills Answer: a) An issue log is an input to the process Manage Stakeholder Expectations. All of the others are tools and techniques for the process. 64 . A project team is in the process of risk tracking and control. The risk control action defined by the mitigation and contingency plans is being implemented in accordance with the details of those plans. Who is responsible for implementing these actions? Project Manager Project Team Risk Owner Risk Manager Answer: c) The risk owner for that particular risk is responsible for implementing the actions defined by mitigation and contingency plan in risk management. A risk owner for a risk is identified during the planning stage of risk management and he helps to assess the risk and produce probability and impact information. He also develops risk mitigation and contingency plans, provides status data for respective risk issues and assists in evaluating risk control action effectiveness. The risk owner also documents threshold criteria of high and medium risks and supports the identification of new risks.
  • 22.
    65 . Basedon the information in the table below, what amount would you need to include in your risk contingency fund? 12000 5000 17000 7000 Answer: d) After EMV calculation, $7000 is required as contingency fund. 66 . Which of the following is the output of qualitative analysis process? Probability of reaching project objectives Project document updates Risk response Risk contingency reserve Answer: b) The output of qualitative risk analysis is project document update with numerically assigning values to the project objectives about overall impact. 67 . During execution, a major problem occurred that was not included in the risk response plan. What should you do FIRST? Create a workaround Re-evaluate the risk identification process Look for any unexpected effects of the problem Tell management Answer: a) Work around is the immediate solution and may not be permanent solution.
  • 23.
    68 . Riskrelated contractual decisions is used when created in which of the following plans? Risk Register Procurement management plan Risk Management Plan Stakeholder register Answer: b) Contract which is the input for procurement management plan. 69 . The project manager has just found an unidentified risk which requires workaround. The project manager is working for weak matrix organization. Who approves this workaround? Functional Manager Customer Project Manager Sponsor Answer: a) In the weak matrix the FM is having highest authority. 70 . Which of the following risk responses guide that the project plan will not be changed to deal with the risk? Exploitation Transference Acceptance Mitigation Answer: c) Acceptance is the response in which no action will be taken. Based on the opportunity or threat, the other responses will be considered. 71 . What will you need as inputs for the qualitative risk analysis of the project in this scenario? Qualitative risk analysis does not happen through the project manager in a functional structure. You will need the risk register, risk management plan, scope baseline, and any relevant organizational process assets. You will need the risk register, risk management plan, outputs of qualitative risk analysis, and any relevant organizational process assets. You will need the risk register, risk management plan, permission from the functional manager, and any relevant organizational process assets. Answer: b) The listed one are inputs. Please refer to PMBOK.
  • 24.
    72 . Onwhich of the following processes does The Project Risk Management knowledge area focuses? Quantitative Risk Analysis Risk Monitoring and Control Potential Risk Monitoring Risk Management Planning Answer: c) Except for C rest of them are processes of risk management. 73 . You and the project team are assessing the risk events and creating a probability and impact matrix for the identified risks. Which one of the following statements best describes the requirements for the data type used in qualitative risk analysis? A qualitative risk analysis requires fast and simple data to complete the analysis. A qualitative risk analysis requires accurate and unbiased data if it is to be credible. A qualitative risk analysis encourages biased data to reveal risk tolerances. A qualitative risk analysis required unbiased stakeholders with biased risk tolerances. Answer: b) Any analysis should be accurate and unbiased and should be from the project interest. 74 . Which is the best technique to identify the risk in a project which provides four different perspective? Root cause analysis SWOT analysis Influence diagramming techniques Assumptions analysis Answer: b) Strength, weakness, opportunity and threat of the project and organization which helps in identification of risks. 75 . You have declined a proposed change request because of the risk associated with it. Where should the declined change request be documented and stored? Change request log Lessons learned Project archives Project document updates Answer: a) The change request log should carry the outcome of change request.
  • 25.
    76 . Projectmanager wants to apply risk rating rule. Which of the following provides the same information? Risk management plan Organizational process assets Enterprise environmental factors Risk probability and impact matrix Answer: b) Risk ratings like low, medium, high definitions can be obtained from OPA. 77 . In which process do you create the Risk Breakdown Structure? Identify Risks Plan Risk Responses Perform Qualitative Analysis Plan Risk Management Answer: d) The RBS is part of the Risk Management Plan. It's structured very similarly to an WBS. The RBS helps you to see how risks fit into categories so you can organize your risk analysis and response planning. 78 . You are working with project team to plan the risk responses for their project. A project team member, does not understand the process that you are using to plan the risk responses. Which approach is the preferred method to address project risks and the risk responses? Risks in the project should be addressed by their probability for creating risk responses. Risks in the project should be addressed by the organization's risk tolerance for creating risk responses. Risks in the project should be addressed by their impact for creating risk responses. Risks in the project should be addressed by their priority for creating risk responses. Answer: d) The risk addressing happens based on the priority.
  • 26.
    79 . Youare budgeting for a project and while interacting with one of the stakeholders, he provides a statement saying that inflate the budget about 25% and asks you to consider the pessimistic estimation. You understood from this conversation that he is referring to the risk. But as a project manager what is the best you can do? Add the 30% as a lump sum contingency fund to handle project risks Add the 30% to your cost estimate by spreading it evenly across all project tasks Create one cost baseline for budget allocation and a second one for the actual project plan Ask for information on risks that would cause your estimate to be too small Answer: d) Instead of taking open statement as it, go to the detailing of risk that could make you to estimate which may result in lessor additional amount of the budget. 80 . Which of the following is the output of control risk process? Quantitative risk analysis Risk audits Change request Qualitative risk analysis Answer: c) Change request will be the output of monitoring and control risk. 81 . You have identified the risk and carried out the risk analysis. What should be the next process from risk management point of view? Qualitative risk analysis Control risk Risk identification Quantitative risk analysis Answer: b) Control risk which is monitoring and controlling process groups takes care of it. 82 . You are the project manager of a construction project. You have completed the risk response planning with your project team and ready to update the risk register to reflect the risk response. Which of the following statements best describes the level of detail you should include with the risk responses which has been created? The level of detail is set by historical information. The level of detail should correspond with the priority of the risk. The level of detail must define exactly the risk response for each identified risk. The level of detail is set of project risk governance. Answer: c) Change request will be the output of monitoring and control risk.
  • 27.
    83 . Youare a project manager working on a software development project. You have developed the risk management plan, identified risks, and determined risk responses for the risks. One of the risks you identified occurs, and you implement the response for that risk. Then, another risk occurs as a result of the response you implemented. What type of risk is this called? Trigger risk Residual risk Secondary risk Mitigated risk Answer: c) Secondary risks occur as a result of the implementation of a response to another risk. 84 . You are determining which risks can affect the project. Which of the following are the inputs to the identify risks process that you will use to accomplish the task? Each correct answer represents a complete solution. Choose that will not apply. Scope baseline Activity cost estimates Risk register Risk management plan Answer: c) Risk register is the output. 85 . You are working with the project stakeholders to begin the qualitative risk analysis process. You will need all of the following as inputs to the qualitative risk analysis process except for which one? Stakeholder register Project scope statement Risk management plan Risk register Answer: a) Stakeholder register is the output of identify stakeholder process. 86 . Which of the following option is true regarding stakeholder engagement level? Possessive, resistant, neutral, supportive and leading Unaware, resistant, neutral, supportive and leading Unaware, resistant, natural, supportive and leading Unaware, resistant, neutral, supportive and mentor Answer: b) Unaware, resistant, neutral, supportive and leading are the different stakeholder levels
  • 28.
    87 . Asa project manager you are collecting information on risks secretly. Which of the following techniques, you are using? Brainstorming Delphi Technique Interviews SWOT Analysis Answer: b) The Delphi technique is a way to get opinions and ideas from experts. This is a technique that uses a facilitator who uses questionnaires to ask experts about important project risks. They take those answers and circulate them - but each expert is kept anonymous so they can give honest feedback.. 88 . You have a list of risks in the risk register. While reassessing the list of risk, you come to the conclusion that some of the risk will not materialize. What would you do with these risks? Add the risks to the risk register Add the risks to a low-priority watchlist Close the outdated risks Add the risk to the issues log Answer: c) So, the risk is coming down. Close the one which is not happening. 89 . What is the other name for positive risks from the risk management books? Benefits Opportunities Ancillary constituent components Contingency risks Answer: b) When the risk is positive, it is an opportunity.
  • 29.
    90 . Youare the project manager on an industrial design project. You found a pattern of defects occurring in all projects over the past few years and think there might be a problem in the process the company is using. You start using Ishikawa diagrams to come up with the root cause for this trend over projects so that you can make recommendations for process changes to avoid this problem in the future. Which process are you doing? Perform Quality Planning Perform Quality Assurance Perform Quality Control Qualitative Risk Analysis Answer: b) He is doing root-cause analysis on process problems, that's Quality Assurance. Remember, Quality control is when you are trying to find problems in your work products through inspection. Quality Assurance is when you are looking at the way your process affects the quality of the work you are doing.. 91 . Monte Carlo simulation modeling is used for the developing the schedule and coming up with budget for the project. For the risk management under which process is it used? Risk Response Planning Quantitative Risk Analysis Risk Identification Qualitative Risk Analysis Answer: b) Monte Carlo analysis is a modeling and simulation technique that is a tool and technique of the Quantitative Risk Analysis process. 92 . PM, the project team, and the key project stakeholders have completed a round of qualitative risk analysis. PM needs to update the risk register with his findings so that he can communicate the risk results to the project stakeholders including management. Expect for which one will PM need to update all of the following information? Prioritized list of quantified risks Watchlist of low-priority risks Trends in qualitative risk analysis Risks grouped by categories Answer: a) Prioritization happens during the beginning of qualitative risk analysis.
  • 30.
    93 . Asa part of Control risk process, the project manager should update the risk register with information on risk reassessment, risk audits, and periodic risk reviews. What else can be updated in the risk register? Actual costs and schedule delays of risk events. Actual outcomes of risk management duties by the project team. Actual cost of risk events. Actual outcomes of the project's risks and of the risk responses. Answer: d) The outcome which can impact the project objectives and the risk response to overcome. 94 . Your team has utilized all of the appropriate tools and techniques for responding to identified project risks and has discovered that some risks have been reduced in impact but remain a potential threat. These risks require further monitoring and are referred to as: Secondary risks Primary risks Cumulative risks Residual risks Answer: d) Residual risks are included in the outputs of the Plan Risk Responses process and are expected to remain as threats. Their probability and impact have been reduced through mitigation. Primary risks are included in the initial risk identification process are generally most obvious. Secondary risks are those risks that result from the decisions about how to manage primary risks. Cumulative risk is a combination or collective expected value of the effect of multiple risks. 95 . You are the project manager of a large, high-profile project in your organization. You have realized that politics within your company may affect the true identification of risk events within the project. You decide that you'd like to use a method to identify risk events through an anonymous process. Which one of the following risk events will allow you to collect and distribute risk information without the stakeholders knowing what other stakeholders are communicating about the project risk events ? Surveys Monte Carlo Technique Checklist analysis Delphi Technique Answer: d) Delphi technique is used to identify and manage risks in an anonymous way in such a political environment.
  • 31.
    96 . Allof the following statements are true regarding risks except for which one? Risks might be threats to the objectives of the project. Risks are certain events that may be threats or opportunities to the objectives of the project. Risks might be opportunities to the objectives of the project. Risks have causes and consequences. Answer: b) Risks are uncertain events that may be threats or opportunities to the objectives of the project.. 97 . You are working on a project. A risk is identified because you don't have expertize to carry out the activity. You decided to outsource it, but the supplier is asking for the price which exceeds the budget. What is this risk called? Internal Secondary risk Pure risk Transference Answer: b) Secondary risk is nothing but risk which arises out of primary risk. 98 . Your current project has 75 internal stakeholders and 245 external stakeholders. Many of the risks within your project will only affect the internal stakeholders, but several of the identified risk events will affect the external stakeholders. Management would like to know the total number of communication channels in the project. How many communication channels exist in this project? 245 51040 102080 320 Answer: b) Use the formula n(n-1)/2= 320(319)/2=51040.
  • 32.
    99 . Youhave just been appointed project manager for a new telecommunications project. There appear to be many risks on this project, but no one has evaluated them to assess the range of possible project outcomes. What needs to be done? Risk identification Risk quantification Risk response planning Risk monitoring and control Answer: a) Risk identification to minimize missing out any unidentified risk. 100 . Which of the following techniques examine the degree to which the organizational strengths offset opportunity and threat while looking into risk? SWOT Analysis Expert Judgment Delphi Brainstorming Answer: a) Strength, Weakness, opportunity and Threat analysis provides the organization assets. 101 . You are the project manager of a new project that uses newly released technology and there's relatively little information about the technology. Though the initial testing looks promising, there's still uncertainty regarding the reliability of the technology. You need to document this aspect of technology risk. Which of the following documents would she use to document the risk, so that she can track and respond to the risk? Project Charter Project Scope Statement Risk Management Plan Risk Register Answer: d) Risk register documents description, category, response, probability, impact, etc.
  • 33.
    102 . Youare actively communicating and working with the project stakeholders. One of the outputs of the Manage Stakeholder Expectations process can create new risks for the project. Which output of the Manage Stakeholder Expectations process can create risks? Change Requests Project Document Updates Project Management Plan Updates Process Assets Updates Answer: a) Change request in any one parameter may increases impact on other parameters of the project and may result in uncertainty. 103 . You would like to utilize sensitivity analysis in your project, but the management does not understand how this will be displayed. What type of chart is usually used with sensitivity analysis to show the relative effect of risks on the project? Ishikawa chart Force field analysis chart GERT Chart Tornado diagram Answer: d) Tornado diagram is a horizontal bar chart starts with high and then descends to low which looks like tornado. 104 . You are managing a construction project. During your risk identification interviews you learn that there has been a string of construction site thefts over the past few months in the area where you will be building your project. The team agrees that it's unlikely people will be able to steal from your site. Even if thieves could get around your security, it's even more unlikely that your project will lose a significant amount of material if a theft does occur. You decide to monitor the risk from time to time to be sure that it continues to have a low probability and impact. Where do you record the risk so that you don't lose track of it? In a trigger On a watchlist In the Probability and Impact Matrix In the Monte Carlo analysis report Answer: b) A watchlist is where you keep risks that don't have a high enough probability or impact to make it into the risk register but still need to be monitored. By recording the risk in a watchlist, you will have a reminder to check to be sure that circumstances haven't changed as your project goes on. That should give you enough time to come up with a risk response strategy if circumstances change as time goes on.
  • 34.
    105 . Youare the project manager working with your project team and other key stakeholders to identify the risks within the project. You are currently aiming to create a comprehensive list of project risks. For that you are using a facilitator to help generate ideas about project risks. What risk identification method is the project manager likely to use? Brainstorming Delphi Techniques Checklist analysis Expert judgment Answer: a) Brainstorming is the most commonly used technique to identify the risk. 106 . What is the reason behind updating work breakdown structure after the risk response decision? Because of work that was omitted during the WBS creation Because of new work generated by the risk responses Because of risk responses that are now activities Because of risks associated with work packages Answer: b) After the risk response new work package might be generated and should be included as part of WBS and later into network diagram. 107 . Two team members are arguing over who was responsible for distributing the risk status. Where should they look to clarify the responsibility? Communication management plan Procurement Management plan Risk register Risk Management plan Answer: a) Communication management plan provides the stakeholder responsibility. 108 . Your project requires that you install 190 computers. The vendor offers you a 15% discount on the basic software if your company will purchase 200 or more computers. You communicate this offer with other functions within the organization so that your project can save significant amount of funds. What is this risk response called? Exploiting Avoidance Sharing Transference Answer: c) Sharing is the opportunity and is opposite to transfer.
  • 35.
    109 . Youhave identified a risk earlier in the project and accepted it. While monitoring the project, the risk occurred. Which of the following documents helps in taking further action? Risk Response Plan Fallback Plan Mitigation Plan Risk Register Answer: a) The risk response plan communicates how specific risks will be dealt with and the action steps that are required to carry them out. 110 . You are the project manager of a large construction project. Part of the project involves the electrical cabling work in the building your project is creating. You and the project team decide that the cabling work is too dangerous so you hire an experienced electrician to perform the work for the project. What type of risk response is this an example of? Acceptance Mitigation Transference Avoidance Answer: c) Transfer is the negative risk response used for shifting the activities in which the project team members do not have expertise. 111 . You are in the middle of the project and while collecting the information as part of earned value management, you find that CPI is 0.74. What you do to make CPI as 1? Reduce a test cycle, in the System Testing phase Reduce scope by cutting down non- essential features Add more resources to expedite the schedule Revisit estimates and eliminate risks; re- estimate Answer: d) Option (c) wouldn't reduce cost. Option (a) and (b) would always have a negative effect as they compromise on quality or scope. Of all the available option's (d) is the one with the minimum negative effect..
  • 36.
    112 . Whileexecuting the project, risk trigger was identified. The project manager responds to this with contingency plan which proved to be ineffective. One of the stakeholders is not happy with this and escalates about his dissatisfaction with risk management team. What should the project manager do? Make sure stakeholders are aware that risk management team performs a high level Inform project sponsor, since it is his job to manage the stakeholder Ask to meet with the stakeholder in person to clarify the situation Inform PMO, that stakeholder behavior is affecting the project team morale. Answer: c) The PM should first speak to the stakeholder and then can interact with PMO. 113 . Over lunch with another project manager, you discuss ways to identify risks on your project. The next day, the other project manager sends you risk identification software created by her company with a copyright date of 1998. What should you do? Find out if using an old format would be acceptable Obtain approval from your legal department Share some of your templates with her to improve her company's abilities Send the software back Answer: d) It's the code of ethics where you need to maintain integrity and confidentiality. 114 . You are a project manager working on a compliance project in a banking firm. The project is scheduled to complete six weeks from now. Your sponsor tells you that if the project is finished sooner, the company can get some monetary incentives offered by the government. Deciding to fast track the project, would have what effect? Increase risk in the project Not affect the project risk Decrease risk in the project Cannot be determined Answer: a) Fast-tracking is the process of rescheduling tasks to be performed in parallel that were originally planned in series. Remember, fast-tracking always involves risk that could lead to increased cost and rework later..
  • 37.
    115 . Whichof the following is NOT a tool in Identify Risks? Brainstorming Risk Urgency Assessment Delphi technique SWOT Analysis Answer: b) A Risk Urgency Assessment is a tool of Qualitative Analysis. Risk Identification is all about finding risks. Qualitative Analysis is about ranking them based on what your team thinks their impact and probability will be for your project. (Quantitative Analysis, on the other hand, is about getting the numbers to back up your opinions). 116 . Your team is developing a risk management plan. Which tool and technique of this process is used to develop risk cost elements and schedule activities that will be included in the project budget and schedule? Planning meetings and analysis Strategies for both threats and opportunities Information gathering techniques Risk data quality assessment Answer: a) Planning meetings and analysis is the only tool and technique of the Risk Management Planning Process. 117 . Which of the following inputs provide information to compare the actual technical accomplishments during project execution to the project's planned schedule of technical achievements? Work performance information Variance and trend analysis risk register forecasting Answer: a) work information provides the information about the comparison.
  • 38.
    118 . Youare preparing for the risk identification process. You will need to involve several of the project's key stakeholders to help you identify and communicate the identified risk events. You will also need several documents to help you and the stakeholders identify the risk events. Which one of the following is NOT a document that will help you identify and communicate risks within the project? Risk register Activity cost estimates Stakeholder register Activity duration estimates Answer: a) Risk register captures all the risks and should be communicated to stakeholder. 119 . All of the following are tools and techniques for risk identification except: Monte Carlo simulation Interviewing SWOT analysis Delphi technique Answer: a) Monte Carlo simulation is associated with Quantitative Risk Analysis and uses iterative simulations to determine project outcomes. 120 . You are managing a software engineering project, when two team members come to you with a conflict. The lead developer has identified an important project risk: you have a subcontractor that may not deliver on time. The team estimates that there is a 40% chance that the subcontractor will fail to deliver. If that happens, it will cost an additional $15,250 to pay your engineers to rewrite the work, and the delay will cost the company $20,000 in lost business. Another team member points out an opportunity to save money an another area to offset the risk. If an existing component can be adapted, it will save the project $4,500 in engineering costs. There is a 65% probability that the team can take advantage of that opportunity. What is the expected monetary value (EMV) of these two things? -14100 6100 -11175 $39, 750 Answer: c) To calculate the expected monetary value (EMV) of a set of risks and opportunities, multiply each probability by its total cost and add them together. In this question, the cost of the risk is -$15,250 + -$20,000 = -$35,250, so its EMV is 40% x -$35,250 = -$14,100. The value of the opportunity is $4,500 and its probability is 65%, so its EMV is 65% x $4,500 = $2,925. So the total EMV for the two is -$14,100 + $2,925 = -$11,175.Don't forget that the cost of a risk is negative, and the cost of an opportunity is positive.
  • 39.
    121 . Youare a project manager with a financial firm that has multinational dealings. You feel the financial meltdown in one of the client countries could affect your project adversely, so you want to hedge your risks. Although the probability of occurrence of the event is low, you are advised to play it safe. In terms of risk attitude, your organization could best be described as? Risk Seeker Risk Averse Risk Neutral Risk Mitigator Answer: b) Someone who doesn't want to take risk is called risk averse and this project manager seems to be part of such an organization. 122 . Which one of the following is NOT a tool or technique for the quantitative risk analysis process? Expert judgment Data gathering and representation techniques Organizational process assets Quantitative risk analysis and modeling techniques Answer: c) Organizational process assets will be used as input. 123 . You have created a contingency response that the cost performance index should be equal to or less than 0.8. From the earned value technique, your project shows EV as $9000, AC as $10000 and PV as $7200. Are you preferred to use contingency reserve? Yes as the CPI is -$1000 No as the CPI is 0.9 Yes as the CPI is -$2800 No as the CPI is 0.8 Answer: b) CPI=EV/AC= 9000/10000= 0.9 which is more than 0.8 and hence not using. 124 . Which of the following process is not mandate for short term project as per PMI? Risk Limitation Perform Qualitative Risk Analysis Identify Risk Perform Quantitative Risk Analysis Answer: d) Quantitative risk analysis is not mandate for short term projects.
  • 40.
    125 . Asyou are executing your project, you are constantly checking your risk register to be sure that you have planned responses for all of your risks. At one of the team status meeting, you find that a lower priority risk has suddenly become more likely. Where do you keep information about low priority risks? Triggers The watchlist Risk Management Plan Qualitative analysis documents Answer: b) Sometimes you'll find that some risks have obviously low probability and impact, so you won't put them in your register. Instead, you can add them to a watchlist, which is just a list of risks that you don't want to forget about, but you don't need to track as closely. You'll check your watchlist from time to time to keep an eye on things. 126 . You are conducting a status meeting and monitoring your risk register when you discover a risk that remains even after you implement all of your response strategies. What kind of risk is this and what should you do about it? It's a secondary risk. You don't need to worry about it. It's a residual risk. You need to plan a response strategy for it. It's a residual risk. You don't need to plan a response strategy for it because you've already implemented all of the risk responses you can plan for. It's a contingency reserve. You should only use it if the first risk occurs Answer: c) Residual risks are risks that remain even after you have planned for and implemented all of your risk response strategies. They don't need any further analysis because you have already planned the most complete response strategy you know in dealing with the risk that came before them. 127 . You are working with management on defining a contingency reserve for your project. Currently the project is scheduled to last 18 months and it has a cost budget of $2.5 million. What two areas of the project can the contingency reserve address in regard to risk management? Quality and costs Cost and resource management Risk and project planning Costs and schedule Answer: d) Contingency reserve will take care of cost and time.
  • 41.
    128 . Oneof the team members find risk management very difficult to manage. She asks you, a lead project manager, at what stage in the project will risk management become easier. What answer best resolves the difficulty of risk management practices and the efforts required? Risk management only becomes easier with practice Risk management only becomes easier when the project is in its closing stage Risk management only becomes easier when the project moves into project execution. Risk management is an iterative process and never becomes easier. Answer: a) Practice makes a man perfect. The same principle applies to risk management. 129 . You are working on a project which is in the development of a software. This software is in the new technology and after the development you know that there will be defects which may get delivered to the customer. If the customer reports these defects, rework will be required and will cost more to the organization as part of the operations. To reduce this overhead cost, you decide to take a proactive approach of introducing special testing task. But this will cost about increase in the project of about 15%, but overall the organization is able to save about 25% of the cost. What is this risk response called? Avoid Share Mitigate Transfer Answer: c) By having a testing team, you are mitigating the risk. 130 . What is the best a project manager can do after carrying out qualitative risk analysis? Choose the best option. Focus on near-term risks first. Create a risk breakdown structure and delegate the risk analysis to the appropriate project team members. Focus on high-priority risks. Analyze as many risks as possible regardless of who initiated the risk event. Answer: c) High priority risks will be first priority.
  • 42.
    131 . Purchasinginsurance is considered an example of risk: Mitigation Transfer Acceptance Avoidance Answer: b) Transfer generally involves the shifting of a risk from one party to another. It does not illuminate or reduce the risk. Insurance is a common form of transfer of risk. 132 . A Project manager is in the planning stage. In the first planning meeting, the project manager has begun the initial process of finding the risk tolerance levels and attitudes of the stakeholders. Which of the following provides good platform for the project manager to start this step? Organizational process asset Project scope statement Project Charter Enterprise environmental factor Answer: d) Enterprise environmental factors provides the risk tolerance levels. 133 . You are a managing a project and outsourced some of the work to contractors. In the status meeting with the contractor, you sensed that there can be delay from the contractor's deliverable or in the extreme conditions, he may not deliver the work packages at all. To overcome this risk, you formed a team with some experts who can work on those work packages in case the contractor fails to deliver. What is the risk response plan here? Transference Mitigation Avoidance Acceptance Answer: b) Risk mitigation means taking some sort of action that will cause a risk, if it materializes, to do as little damage to your project as possible. Having team members spend time doing work to prepare for the risk is a good example of risk mitigation.
  • 43.
    134 . Whatis salience model which helps in identifying risks from different stakeholders? Influence/impact grid, grouping the stakeholders based on their active involvement ('influence') in the project and their ability to affect changes to the project's planning or execution ('impact'). Grouping the stakeholders based on their level of authority ('power') and their active involvement ('influence') in the project. Grouping the stakeholders based on their level of authority ('power') and their level or concern ('interest') regarding the project outcomes. Describing classes of stakeholders based on their power (ability to impose their will), urgency (need for immediate attention), and legitimacy (their involvement is appropriate). Answer: d) Stakeholder analysis helps in identifying stakeholder's interest, impact, expectation, power. 135 . With regards to control risk, which of the following statement is not true? Risk identification and monitoring should occur throughout the life of the project. Risk audits should occur throughout the life of the project and are specifically interested in measuring the team's performance in the Risk Identification and Risk Monitoring and Control processes. Risks should be monitored for their status and to determine whether the impact to the objectives have changed Technical performance measurement variances may indicate that a risk is looming and should be reviewed at status meetings. Answer: b) Risk audits should be performed throughout the life of the project and are specifically interested in looking at the implementation and effectiveness of risk strategies. 136 . You are the project manager in company XYZ. You have been asked to create a proposal for a construction project for a client. While studying the relevant details, you realize that there are several requirements within the SOW and RFP provided by the client that would eliminate XYZ from bidding on the construction project. You propose to management to allow XYZ to create a partnership with a competitor GFK so that together they could bid on the construction project and qualify for the customer's requirements. What risk response are you proposing to management? Exploiting Teaming agreement Transference Sharing Answer: d) Sharing is a positive risk response often seen through partnerships and teaming agreements to seize an opportunity. Sharing response is where two or more entities share a positive risk. Risk sharing deals with sharing of responsibility and accountability with others to facilitate the team with the best chance of seizing the opportunity. Teaming agreements are good example of sharing the reward that comes from the risk of the opportunity.
  • 44.
    137 . Youhired a contractor to complete a portion of your project work. The contract used was a cost-plus contract. If you were to perform a risk audit, who would carry the risk in this scenario? You would because you are the project manager. Contractor would because of the contract type. You would because of the contract type. Contractor would because he is the hired contractor. Answer: c) The buyer carries the risk in case of cost reimbursable type of contract. 138 . Defining ------------- will provide a structure for systematically identifying risks to a consistent level of detail during the project planning process. The areas defined in this process should reflect common sources of risk for the industry or application area. Assumptions Constraints The product description Risk categories Answer: d) Assumptions are information items that should be verified. They are not generally considered to be based on factual data. Constraints are limitations that should be considered when developing project plans. The product description provides details about the complexity of the product to be delivered. Risk categories assist is detailed risk identification and may be utilized with a Risk Breakdown Structure (RBS). 139 . You are communicating to the stakeholders about the project status showing there is a delay in the project. You decide to carry out fast tracking as part of schedule compression in collaboration with stakeholder agreement. What is the impact of this technique? Costs Quality control concerns Human resource needs Risks Answer: d) Fast Tracking makes the project riskier.
  • 45.
    140 . Theproject is scheduled to last for 18 months. Management asks PM how often the project team is participating in risk reassessment in this project. What should PM tell the management if he is following the best practices for risk management? Project risk management is scheduled for every month in the 18-month project. Project risk management has been concluded with the project planning. At every status meeting of the project team, project risk management is an agenda item. Project risk management happens at every milestone. Answer: c) Risk management should happen throughout the project and the best practice is to have during status meeting. 141 . You are working with his project team to plan the risk responses for a Project. You would like the project team to work together on establishing risk thresholds in the project. What is the purpose of a risk threshold? It helps to identify those risks for which specific responses are needed It is a limit of the funds that can be assigned to risk events. It is a warning sign that a risk event is going to happen. It is a study of the organization's risk tolerance. Answer: a) Every organization defines the risk threshold so that it can take appropriate action based on the trigger points. 142 . You and the project team have created risk responses for many of the risk events in the project. Where should you document the proposed responses and the current status of all identified risks? Stakeholder management strategy Risk management plan Risk register Lessons learned documentation Answer: c) Risk register is the document in which all the risks will be entered.. 143 . Choose the incorrect statement: Probability for success is greatest in the project Closing processes. The project manager's influence is greatest in the project Closing processes. The stakeholders' influence is least in the project Closing processes. Risk is greatest in the project Closing processes. Answer: d) Risk is lowest during the Closing processes because you've completed the work of the project at this point.
  • 46.
    144 . Youare working in a project and identified some risks related to procurement. You identified the procurement manager as a person who is empowered with a risk response and will control all aspects of the identified risk response in which a particular risk event will happen within the project. What title, in regard to risk, is bestowed on procurement manager? Risk expeditor Risk owner Risk team leader Risk coordinator Answer: b) Risk owner is the one who monitors and ensures that risk response being implemented.. 145 . You are the project manager of a Project and there's a risk that your team has identified, which could cause the project to be delayed by more than a month. You don't want this risk event to happen so you devise extra project activities. The extra steps, however, will cost the project an additional $10,000. What type of risk response is this approach? Enhancing Exploiting Mitigation Transference Answer: c) Mitigation is reducing the impact for the project deliverables. 146 . You are a project manager in a financial firm with multinational dealings. You feel the financial meltdown in one of the client's countries could affect your project adversely and you want to hedge your risks. Although the probability of occurrence of the event is low, you are advised to play it safe. In terms of risk attitude, your organization could best be described as? Risk Seeker Risk Averse Risk Neutral Risk Mitigator Answer: b) Someone who doesn't want to take risks is called risk averse and the project manager seems to be part of such an organization. Option (c) risk neutral describes a person/or an organization which is indifferent to the risk and option (a) risk seeker suggests an aptitude to take risks with an opportunity for higher returns. Option (d) risk mitigation is a risk response strategy and is an invalid choice.
  • 47.
    147 . Sensitivityanalysis is a technique for systematically changing parameters in a model to determine the effects of such changes and is useful for computer modelers for a range of purposes. Which of the following options will not be useful to meet the purpose of sensitivity analysis? Increased understanding or quantification of the system Estimating the average outcome Model development Decision making or the development of recommendations for decision makers Answer: b) Average outcome is not a good technique. All remaining choices are good for sensitivity analysis. 148 . Using the following information and a normal distribution curve, what is the probability that the project will be completed in 64 days? Optimistic time is 48 days. Pessimistic time is 72 days. Most likely time is 60 days 0.16 0.84 0.5 1 Answer: b) To Determine the probability of completing in 64 days, the following steps are required: 1. Determine the weighted average using the formula {Optimistic + 4(Most Likely) + Pessimistic}/6. 2. Determine the standard deviation using the formula (Pessimistic - Optimistic) / 6. In the normal distribution curve there is a 68% probability that the outcome will be within 1 standard deviation from the mean. There is a 95% probability that the result will fall within 2 standard deviations from the mean and a 99.73% probability that the result will fall within 3 standard deviations from the mean. If the mean is at the 50% point and there is a 68% probability of the result falling within plus or minus one standard deviation of the mean, then the probability of 1 standard deviation is divided by 2. The result is 34. Adding 34 to 50% = 84%. Subtracting 34 from 50% = 16%. The Standard deviation in this example is 4. The mean is 60. 60 + 4 = 64 or one standard deviation from the mean. 50% + 34 = 84%. 149 . Which of the following is NOT a tool or technique of Control Risks? Bringing in an outside party to review your risk response strategies Revisiting your risk register to review and reassess risks Using Earned Value analysis to find variances that point to potential project problems Gathering information about how the work is being performed Answer: d) When do you gather work performance information? You do it when you're reporting on the performance of the team - that's why it's a tool and technique of the Report Performance process. But that's not something you do during Monitor and Control Risks - Work Performance Information is an input to that process, which means it needs to be gathered BEFORE you start monitoring and controlling your risks. Some questions on the PMP exam will describe tools or techniques rather than using their names. A question might say 'bringing in an outside party to review your risk response strategies' instead of 'Risk Audit'. You're actually asked about concepts you've learned, not just about a bunch of things you've memorized.
  • 48.
    150 . Whenyou are working on a project to mitigate the risk you decide to use compression technique. Which of the following technique calls for updating HR management plan? Teaming agreements Transference Crashing the project Fast tracking the project Answer: c) Crashing adds to resources which in turn leads to updating of HR plan. 151 . You are working with your project team to begin identifying risks for the project. As part of your preparation for identifying the risks within the project you will need many inputs for the process. Which one of the following is NOT an input to the risk identification process? Quality management plan Cost management plan Stakeholder register Procurement management plan Answer: d) Procurement management plan is not an input for identify risk process. 152 . What is the EMV for a risk which is threat with probability of 40% and impact of $7000? Negative $2800 Negative $67,000 Zero - the risk event has not yet occurred 27000 Answer: a) EMV= 40% * $7000=$2800 and is negative as it will cost to the project.
  • 49.
    153 . Youare asked to identify risk events within the project. You would first like to examine the project documents including the plans, assumptions lists, project files and contracts. What key thing will help you to discover risks within the review of the project documents? The project documents will help the project manager to identify what risk identification approach is best to pursue. Lack of consistency between the plans and the project requirements and assumptions can be the indicators of risk in the project. Poorly written requirements will reveal inconsistencies in the project plans and documents. Plans that have loose definitions of terms and disconnected approaches will reveal risks. Answer: b) The variation from the expected can result in risk in the project. 154 . Qualitative risk analysis uses lot of tools and techniques. Which is not one of them? Risk urgency assessment Expected monetary value analysis Probability and impact matrix Risk categorization Answer: b) Qualitative Risk Analysis is all about figuring out prioritizing each risk, and figuring out its probability and impact. It's an important part of risk planning. But it's not about coming up with specific numbers! That's what Quantitative Risk Analysis is for - and EMV analysis is part of Quantitative (not Qualitative) analysis, because it's where you assign numeric values to risks. 155 . What is pure risk? It is a risk event that is generated due to errors or omission in the project work. It is a risk event that is created by a risk response. It is a risk event that only has a negative side, such as loss of life It is a risk event that cannot be avoided because of the order of work. Answer: c) Pure risk is always negative and should come out of that. 156 . You are preparing to plan risk responses for your project with your project team. How many risk responses are available for a positive risk event in the project? Three Four Seven One Answer: b) Both positive and negative carries 4 responses.
  • 50.
    157 . Whythe qualitative risk analysis should be carried out? It is a cost-effective means of establishing probability and impact for the project risks. Qualitative risk analysis helps segment the project risks, create a risk breakdown structure, and create fast and accurate risk responses. All risks must pass through quantitative risk analysis before qualitative risk analysis. It is a rapid and cost-effective means of establishing priorities for the plan risk responses and lays the foundation for quantitative analysis. Answer: d) Qualitative risk analysis helps in providing ranking after arriving at probability and impact. 158 . Identify Risk process determines the risks that affect the project and document their characteristics. Why should the project team members be involved in the Identify Risk process? They are the individuals that will need a sense of ownership and responsibility for the risk events. They are the individuals that will have the best responses for identified risks events within the project. They are the individuals that are most affected by the risk events. They are the individuals that will most likely cause and respond to the risk events. Answer: a) Please note that involve the team members for any planning activities.. 159 . You are conducting risk management meeting and identified a risk with low probability and less impact. What do you do with this risk? Risk alarm Watchlist Observation list Risk register Answer: b) Low risks and residual risks are kept under watchlist. 160 . The PM asked you to help him complete some probability distributions for his project. What portion of the project will you most likely use for probability distributions? Bias towards risk in new resources Risk probability and impact matrixes Risk identification Uncertainty in values such as duration of schedule activities Answer: d) Probability distribution provides the uncertainties in values like cost, time.
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    161 . Whichof the following statement is true? The quantitative risk analysis process will review risk events for their probability and impact on the project objectives. The quantitative risk analysis seeks to determine the true cost of each identified risk event and the probability of each risk event to determine the risk exposure. The quantitative risk analysis process will analyze the effect of risk events that may substantially impact the project's competing demands. The quantitative risk analysis reviews the results of risk identification and prepares the project for risk response management. Answer: c) Quantitative risk analysis helps in numerically assigning the impact considering the overall project objectives. 162 . Which of the following is not an input for identifying stakeholders process? Project Charter Organizational process assets Project management plan Enterprise environmental factors Answer: c) Project management plan is developed as part of the planning whereas identifying stakeholders happens at the initiating process group. 163 . While addressing the root causes of the risks, you are using cause and effect diagram. But sponsor is not happy and advises you to use Ishikawa or fishbone diagram. To what conclusion will you come after analyzing this? It is a graphical representation of situations showing causal influences. It is the same thing as a root cause diagram. It shows how various elements of a system interrelate. It diagrams the risks according to the work breakdown structure including resources. Answer: b) The other name for cause and effect diagram is Ishikawa or fishbone diagram.. 164 . There are six inputs to the quantitative risk analysis process. Which one of the following is NOT an input to the perform quantitative risk analysis process? Enterprise environmental factors Risk management plan Cost management plan Scope Baseline Answer: d) Scope Baseline is not an input.
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    165 . Youare working with the project team on the Perform Qualitative Risk Analysis process. You are having the project team to review the project scope statement as an input to the qualitative risk analysis process. Why? The project scope statement must be understood to see the project requirements and the inherent risks of the project. The project scope statement will reveal the type of project as either a recurrent or first-of-its- kind project. The project scope identifies the risks associated with project constraints. The project scope statement must be reviewed to understand the quality requirements and the risks associated with the demand for quality. Answer: b) Scope statement is about scope description, assumption, constraints, acceptance criteria, etc. 166 . Project risk is typically characterized by which three elements: Severity of impact, duration of impact and cost of impact Identification, type of risk category and probability of impact Risk event, risk probability and the amount at stake Occurrence, frequency and cost Answer: c) A risk event is the actual occurrence of the risk. Example-equipment failure. Risk probability is the likelihood that a risk event may occur. Amount at stake refers to the impact or consequence of the risk and is usually described in terms of the effect on cost or schedule 167 . You are coming up with risk responses plan. You realized that if any unknown risk materializes, you need to park some money for the same. For this you refer to historical data and come up with some figure of how much should be parked. What is this called? General contingency to try to compensate Document the unknown risk items and calculate the expected monetary value based on probability and impact that result from the occurrence Determine the unknown risk events and the associated cost, then add the cost to the project budget as reserves Add a 10% contingency Answer: a) The past experience or the historical data helps in contingency planning.
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    168 . Inwhat portion of a project are risk and opportunities greatest and require intense planning and anticipation of risk events? Closing Planning Initiating Executing Answer: c) Risk will be highest during the initial stages and should come down as the project progresses. 169 . Your organization is running a project with budget of $X. You already progressed about 80% of the work and come to know that a new law is being implemented which may affect the project. What is the best response you can take at this point of time? Acceptance Transference Mitigation Enhance Answer: a) The organization has already invested so much. Better option is to proceed and see what happens which is nothing but acceptance of the risk. 170 . You and the project team are recreating a probability and impact matrix using RAG rating. There is some confusion and disagreement among the project team as to how a certain risk is important and priority for attention should be managed. Where can we determine the priority of a risk, given its probability and impact? Risk management plan Project sponsor Risk response plan Look-up table Answer: d) Look up table provides the weightage based on Probability and Impact.