11.0 Risk Management Terms

Question 1

A risk response appropriate for both positive and negative risks, but often used for smaller risks within a project.

Answer 1

Acceptance

Question 2

Risks that have an uncertain, unclear nature, such as new laws or regulations, in the marketplace conditions, and other risks that are nearly impossible to predict

Answer 2

Ambiguity risks

Question 3

A risk response to avoid the risk

Answer 3

Avoidance

Question 4

The most common approach to risk identification; usually completed by a project team with SMEs to identify the risks within the project

Answer 4

brainstorming

Question 5

These risks may have negative or positive outcomes. Examples include using a less experienced worker to complete a task, allowing phases or activities to overlap, or forgoing the expense of formal training for the on-the-job education

Answer 5

business risks

Question 6

A ranking approach to identify the probability and impact by using a numerical value, from .01 (very low) to 1.0 (certain)

Answer 6

cardinal scales

Question 7

a quick and cost-effective risk identification approach.

Answer 7

checklists

Question 8

The consideration of the risk ranking scores that takes into account any bias, the accuracy of the data submitted, and the reliability of the nature of the data submitted

Answer 8

Data precision

Question 9

A method to determine which of two or more decisions is the best one. The model examines the costs and benefits of each decision’s outcome and weights the probability of success for each of the decisions.

Answer 9

Decision tree

Question 10

An anonymous method of querying experts about
foreseeable risks within a project, phase, or
component of a project. The results of the survey are analyzed by a third party, organized, and then
circulated to the experts. There can be several rounds of anonymous discussion with this technique, without fear of backlash or offending
other participants in the process. The goal is to gain consensus on project risks within the project.

Answer 10

Delphi Technique

Question 11

A risk response that attempts to enhance the conditions to ensure that a positive risk event will likely happen

Answer 11

Enhancing

Question 12

A risk response that is appropriate for both positive and negative risk events that may be outside of the project manager’s authority to act upon

move issue to the director; roll it up to the director

Answer 12

Escalating

Question 13

The monetary value of a risk exposure based on the risk’s probability and impact in the risk matrix. The approach is typically used in quantitative risk analysis because it quanitifies the risk exposure.

Answer 13

Expected monetary value (EMV)

Question 14

A risk response that takes advantage of the positive risks within a project

Answer 14

Exploit

Question 15

These risks are outside of the project, but directly affect it – for example, legal issues, labor issues, a shift in project priorities, or weather. “force majeure” risks call for disaster recovery rather than project management.

Answer 15

External risks

Question 16

System or process flowcharts show the relationship between components and how the overall process works. These are useful for identifying risks between system components.

Answer 16

Flowcharts

Question 17

This diagram charts out a decision problem. It identifies all of the elements, variables, decisions, and objectives, and also how each factor may influence another.

Answer 17

Influence diagrams

Question 18

Cause-and-effect diagrams are also called fishbone diagrams and are used to find the root cause of factors that are causing risks within the project.

Answer 18

Ishikawa diagrams

Question 19

low priority risks are identified and assigned to a watch list for periodic monitoring

Answer 19

low-priority risk watch list

Question 20

A risk response effort to reduce the probablility and/or impact of an identified risk in the project.

Answer 20

Mitigation

Question 21

A simulation technique that got its name from the casinos of Monte Carlo, Monaco. The simulation is completed using a computer software program that can simulate a project, using values for all possible variables, to predict the most likely model.

Answer 21

Monte Carlo technique

Question 22

A ranking approach that identifies and ranks the risks from very high to very unlikely or to some other value

Answer 22

Ordinal scales

Question 23

The performing organization can contribute to the project’s risks through unreasonable cost, time, and scope expectations; poor project prioritization; inadequate funding or the disruption of funding; and competition with other projects for internal resources.

Answer 23

Organizational risks

Question 24

A prompt list used for risk identification. Examines risks in
Political, Economic, Social, Technological, Legal, and Environmental domains

Answer 24

PESTLE

Question 25

A matrix that ranks the probability of a risk event occurring and its impact on the project if the event does happen; used in qualitative and quantative risk analyses.

Answer 25

Probability and impact matrix

Question 26

These risks deal with faults in the management of the project: the unsuccessful allocaton of time resources, and scheduling; unacceptable work results; and poor project management

Answer 26

Project management risks

Question 27

These risks have only a negative outcome. Examples include loss of life or limb, fire, theft, natural disasters, and the like.

Answer 27

Pure risks

Question 28

This approach “qualifies” the risks that have been identified in the project. Specifically, qualitative risk anaylsis examines and prioritized risks based on their probablility of occurring and their impact on the project should they occur.

Answer 28

Qualitative risk analysis

Question 29

This approach attempts to numerically assess the probability and impact of the identified risks. It also creates an overall risk score for the project. This method is more in-depth than qualitative risk analysis and relies on several different tools to accomplish its goal.

Answer 29

Quantitative risk analysis

Question 30

An ordinal scale that uses red, amber, and green to capture the probability, impact, and risk score.

Answer 30

RAG rating

Question 31

Risks that are expected to remain after a risk response.

Answer 31

Residual risks

Question 32

An uncertain event or condition that can have a positive or negative impact on the project.

Answer 32

Risk

Project risk

Question 33

This systematic process of combing through the project, the project plan, the WBS, and all supporting documentation to identify as many risks that may affect the project as possible.

Answer 33

Risk Identification

Question 34

A project management subsidiary plan that defines how risks will be identified, analyzed, responded to, and monitored within the project. The plan also defines the iterative risk management process that the project is expected to adhere to.

Answer 34

Risk Management plan

Question 35

The agreed-upon approach to the management of the project risk processes

Answer 35

Risk management planning

Question 36

the individuals or entities that are responsible for monitoring and responding to an identified risk within the report.

Answer 36

Risk owners

Question 37

This is a project plan component that contains all of the information related to the risk management activities. It’s updated as risk management activities are conducted to reflect the status, progress, and nature of the project risks.

Answer 37

Risk register

Question 38

This explains the overall project risks and provides summaries about the individual project risks

Answer 38

Risk report

Question 39

An audit to test the validity of the established risk responses.

Answer 39

Risk response audit

Question 40

The level of ownership an individual or entity has over a project risk

Answer 40

Risk responsibilities

Question 41

The calculated score based on each risk’s probability and impact. the approach can be used in both qualitative and quantitative risk analysis

Answer 41

Risk score

Question 42

This type of identification aims to find out why a risk event may be occurring, the casual factors for the risk events, and then, eventually, how the events can be mitigated or eliminated.

Answer 42

Root cause identification

Question 43

New risks that are created as a result of a risk response.

Answer 43

secondary risks

Question 44

A quantitative risk analysis tool that examines each risk to determine which one has the largest impact on the project’s success

Answer 44

sensitivity analysis

Question 45

A risk response that shares the advantages of a positive risk within a project

Answer 45

Sharing

Question 46

This is the process of examining the project from the perspective of each characteristic: Strengths, Weaknesses, Opportunities, and Threats

Answer 46

SWOT analysis

Question 47

A prompt list used in risk identification to examine the Technical, Environmental, Commercial, Operational, Political factors of the project

Answer 47

TECOP

Question 48

Technical risks are associated with new, unproven, or complex technologies being used on the project. Changes to the technology during the project implementation can also be a risk. Quality risks are the levels set for expectations of impractical quality and performance.

Answer 48

Technical, quality, or performance risks

Question 49

A risk response that transfers the ownership of the risk to another party. Insurance, licensed contractors, or other project teams are good examples of transference. A fee and contractual relationships are typically involved with the transference of a risk.

Answer 49

Transference

Question 50

A type of risks based on the variations that may occur in the project, such as production, number of quality errors, or even the weather.

Answer 50

variability risks