Bootcamp Chapter 11 Flashcards
You are evaluating two projects. Project A has an expected duration of 90 days with a standard deviation of 10 days, and Project B has an expected duration of 100 days with a standard deviation of 4 days. Which statement is not true regarding these two projects?
A. Project B is riskier than Project A because its expected duration is longer
B. Project A is riskier than Project B because its standard deviation is larger
C. The maximum possible duration of Project A estimated at 95% probability is longer than Project B
D. Both projects have the potential to be completed within 90 days
ANSWER: A
Its not true regarding the two projects because a longer duration does not necessarily indicate higher risk.
Which of these statements is true for the Initiation phase?
A. The project’s probability of success is high
B. Stakeholder influence on the project is low
C. Risk is high
D. Expended cost-to-date is high
ANSWER: C
Risk is highest at the beginning of the project, when there are many unknowns.
You have a 60% probability of buying software for $75k. But if you choose to build it, there is a 50% probability that it will take 6 weeks. What is the probability that you will choose to build it and it will be done in 6 weeks?
A. 50%
B. 30%
C. 20%
D. 10%
ANSWER: C
This is similar to a decision tree question, calculated as .40X.50=.20 or 20 %. This is a 40% chance of building the software because there is a 60% chance you will buy it. If you build it, there is another 50% chance it will take 6 weeks, so the answer is 40% of 50%.
The risk management processes are predominately what kind of process, and when should they begin?
A. Initiating; they should begin during Initiating when the project charter is created
B. Planning; they should begin during Planning when the risk management plan is written
C. Planning; they should begin during Planning, in parallel with the Initiating processes
D. Executing; they should begin as project work begins
ANSWER: C
During Initiating, you should document constraints and assumptions, which are a good starting point for risk planning
Which statement best completes this sentence; The project charter, the project management plan, and the stakeholder register are:
A. Inputs to the Plan Risk Management process
B. Inputs to the Perform Qualitative Risk Analysis process
C. Inputs to the Perform Quantitative Risk Analysis process
D. Inputs to the Plan Risk Responses process
ANSWER: A
To develop the risk management plan, you must look at the project charter and the project management plan which define the project objectives that could be affected by potential risks.
Implementing risk responses, tracking risks, monitoring residual and secondary risks, and evaluating the effectiveness of risk responses describes which process?
A. Identify Risks
B. Perform Qualitative Risk Analysis
C. Control Risks
D. Plan Risk Responses
ANSWER: C
Risk responses are not implemented during any of the other processes listed.
During planning, a market analyst informs you that the price of materials for your project may increase during the life of the project. this source of uncertainty can best be described as:
A. A risk
B. An opportunity
C. A threat
D. An enterprise environmental factor
ANSWER: C
The source of uncertainty is a risk, and market fluctuations is an enterprise environmental factor but threat is the most specific term because it defines how the source of uncertainty will affect the project
When running projects, a company should:
A. Avoid all risks
B. Accept only positive risks
C. Accept negative risks if the rewards offset the risk
D. Buy insurance to transfer all risks to another party
ANSWER: C
Companies must balance positive and negative risks for the good of the project and the good of the company.
What is the primary output of the Identify Risks process?
A. Risk register
B. Change requests
C. Risk management plan
D. Project documents updates
ANSWER: A
The other answers are outputs of other risk management processes
For which Project Risk Management process is a SWOT analysis most helpful?
A. Plan Risk Management
B. Identify Risks
C. Perform Qualitative Risk Analysis
D. Perform Quantitative Risk Analysis
ANSWER: B
B is correct because looking at the strengths, weaknesses, opportunities, and threats (SWOT) helps you identify both negative and positive risks that should be listed on the risk register.
Which of the following would be least likely to be updates to listed risks in the risk register?
A. EMV values
B. Probability and Impact matrix scores and ranking
C. Monte Carlo
D. Residual and secondary risks
ANSWER: C
A,B and D are all elements within the risk register as a result of one of the risk management processes. C is the correct answer because it is not a part of the risk register, but rather a tool likely to be used as part of the Perform Quantitative Risk Analysis process.
The risk management plan can include all of the following, except:
A. Risk breakdown structure
B. Roles and responsibilities
C. Reporting formats
D. Product metrics
ANSWER: D
Product metrics are not a component of the risk management plan
which statement best defines the term “reserve analysis”?
A. Time or money set aside for unknown risks
B. Time or money set aside for known risks
C. A comparison of the amount of reserves remaining to the risks remaining
D. A tool and technique for Control Risks
ANSWER: C
Which modeling technique shows a decision under consideration and the implications of all possible choices?
A. Sensitivity analysis
B. Monte Carlo
C. EMV analysis
D. Decision tree analysis
ANSWER: D
A decision tree is a technique used to help make and defend more complicated decisions.
Which of the following is typically not included in transferring risks?
A. Eliminating the risk
B. Shifting some or all of the financial impact to another party
C. Paying a risk premium to a third party
D. Using insurance, perofrmance bonds, warranties, etc
ANSWER: A
Transferring risk does not eliminate the risk.
