Chapter Risk

Question 1

There is a probability of 0.1 that your prototype will be destroyed in transit to a facilitated workshop where it is to be analyzed. If this occurs, it will result in a loss of US $10,000; the cost of rebuilding it. The insurance cost for this event is US$700, with a deductible amount of US$250. Should the project you buy this insurance?

A. No, since the deductible amount changes the expected monetary value of the risk event.
B. Yes, since $1,000 > $725.
C. No, since $1,250 > $1,000.
D. Yes, since $1,000 > $700.

Answer 1

The correct answer is B.

Question 2

Which of the following is the primary responsibility of a risk owner?

A. Quantitatively analyze risks as assigned by the project manager.
B. Report to the project manager that a risk has occurred, and note the consequences.
C. Respond to risk triggers and implement the planned risk responses.
D. Identify new risks and create workarounds.

Answer 2

The correct answer is C.

Question 3

You are performing an audit of another project manager’s project and notice that she did not consider the network diagram as part of
the Identify Risks process. As a result, the project manager will probably do which of the following?

A. Overlook some stakeholders in her risk evaluation.
B. Overlook some activities in her risk evaluation.
C. Overlook some path convergence issues in her risk evaluation.
D. Overlook activity precedence in her risk evaluation.

Answer 3

The correct answer is C.

Question 4

Risk owners can potentially have conflict with risk auditors because risk auditors:

A. Measure the effectiveness of the risk thresholds
B. Investigate the effectiveness of the risk owner
C. Report to the project manager
D. Report to the stakeholders

Answer 4

The correct answer is B.

Question 5

A project manager analyzed a US $800,000 project that involves 30 team members and has three customers. Why is there a need
for an analysis of secondary risks on this project?

lt provides a vehicle for efficient stakeholder involvement.
lt provides a way to effectively decrease the amount of contracting on the project.
lt helps determine and address new risks created as a result of the risk response strategies
chosen.
lt helps create a prioritized list of risks.

Answer 5

The correct answer is C.

Question 6

The project has been chartered to address low customer satisfaction ratings for the help desk of a large online retailer. You and your
team are considering options including upgrading computer systems and software programs, adding additional help desk staff, and
improving help desk training. You realize the impact of such changes will be difficult to measure, and you are finding it challenging to
evaluate the exact cost impact of risks and responses the team has identified. You should evaluate on a(n):

A. Qualitative basis
B. Quantitative basis
C. Econometric basis
D. Numerical basis

Answer 6

The correct answer is A.

Question 7

Risk acceptance is a strategy you have used on many projects. Your current project appears to require this strategy as well. You
know there are a number of outcomes that may result. Which of the following is not a possible outcome of passively accepting a
risk?

A. The project will experience a cost or schedule overrun.
B. The project will recover costs from the insurance company.
C. The project will suffer no damages.
D. The project will use the management reserve.

Answer 7

The correct answer is B.

Question 8

During the Plan Risk Responses process, the team is discussing ways to deal with a risk. They have come up with the following
options: a) outsource the work, b) provide more training to the team members, e) wait to see if the risk actually happens, d) ignore the
risk and e) do the risky activity sooner in the project. Which of the following is a risk response strategy that was forgotten in the above
situation?

A. Assign the activity to a more experienced person to handle.
B. Purchase insurance to cover the anticipated cost.
C. Prototype the product.
D. Remove the activity causing the risk from the project.

Answer 8

The correct answer is D.

Question 9

Which parts of the risk management process use the project scope statement as an input?

A. Plan Risk Responses and Monitor Risks
B. Perform Qualitative Risk Analysis and Implement Risk Responses
C. Plan Risk Management and Monitor Risks
D. Identify Risks and Perform Quantitative Risk Analysis

Answer 9

The correct answer is D.

Question 10

Your team is assessing options to deal with a problem on the project. A team member has a copy of a software program on his home
computer that he offers to you at no cost because it may solve the problem. What should you do?

A. Refuse the software and notify the owner of the software.
B. Accept the software with thanks,
C. Accept the software and use it until you are able to buy the software yourself.
D. Do not accept the software, and advise the team member that such activity is in violation of
copyright law.

Answer 10

The correct answer is D.

Question 11

You are confident that the team has done a thorough job of identifying and analyzing potential threats and opportunities on the project. You have been able to take advantage of several opportunities that are expected to save the project thousands of dollars. Your team has also done a great job of planning for threats, and contingency plans and tailback plans have been documented. All of the following are results of adding to the risk register in the Plan Risk Responses process except:

A. The need for workarounds is minimized.
B. The need for contingency reserves is minimized.
C. You are in control of the project as it progresses with few surprises.
D. By managing the plan, you are able to avoid some risks while mitigating the effects of others.

Answer 11

The correct answer is B.

Question 12

During the implementation of a contingency plan, a team member notices the plan worked only marginally. There are three similar contingency plans developed for other risks that have not yet happened. He should recommend which of the following?
A. A project change request B. A new risk rating matrix e C. A workaround
D. A risk responsibility chart review

Answer 12

The correct answer is A.

Question 13

You have a US $100,000,000 project that has 34 team members in four different countries. At the completion of project planning, you
have identified six risks, 2,256 work packages, 1,300 stakeholders, and seven phases to the project life cycle. What part of this project
management plan needs to be revisited?
A. The staffing management plan
B. The Identify Risks process
C. The network diagram
D. The communications management plan

Answer 13

The correct answer is B.

Question 14

All the following are outputs of the Perform Qualitative Risk Analysis process except:

A. Risk categorization and project risk score
B. Risk urgency and watch list
C. Root causes of risk and prioritized list of risks
D. Probabilities and impacts and project risk ranking

Answer 14

The correct answer is C.

Question 15

Which of the following is the most likely cause of poor risk management?

A. Poor risk. monitoring and control
B. Lack of detail in the project scope statement
C. Inadequate risk response planning
D. Lack of a prioritized list of risks

Answer 15

The correct answer is D.

Question 16

You are embarking on a new technology upgrade project that is considered key to future growth of the business. Because of the
critical nature of the project, you recognize the importance of performing thorough risk management, and you want to make sure you
have considered all relevant project information before beginning. All the following are always inputs to the risk management process
except:

A. Historical information
B. Work breakdown structure
C. Lessons learned
D. Project status reports

Answer 16

The correct answer is D.

Question 17

A project team has identified the risk that new software applications being developed may not be compatible with the operating system on 30 percent of the organization's computers. They estimate that the risk is 65 percent likely to occur and that it would have a cost impact of $50,000 and add two weeks to the project schedule. They are unable to come up with a way to mitigate the risk. How should they handle it?
A. Plan a contingency reserve.
B. Plan a workaround.
C. Add the risk to the issue log.
D. Plan a management reserve.

Answer 17

The correct answer is A.

Question 18

Determining cost and schedule reserves, identifying risks requiring the most attention, and determining the overall project risk
exposure are all part of the processes of Perform Qualitative Risk Analysis, Perform Quantitative Risk Analysis, and:

A. Identify Risks.
B. Plan Risk Management.
C. Plan Risk Responses
D. Monitor Risks.

Answer 18

The correct answer is 18

Question 19

A new project manager is beginning work on her first project. She is planning to use her training to implement many risk identification methods. She realizes that some identified risks will be managed throughout the project, while others will not be considered important enough to deal with. She is aware that risk management is ongoing throughout the project, as new risks may be identified, risk ratings may change, and the project itself may change. She realizes that all the following are common results of risk management except:

A. The project charter is changed.
B. Contract terms and conditions are created.
C. The project management plan is changed.
D. The communications management plan is changed.

Answer 19

The correct answer is A.

Question 20

During the identification of risks on your project, you have determined there is a very high probability of conflict among the team during project executing over one aspect of the final design of the project. Which of the following is an example of mitigating the impact of the risk to the project?

A. Obtain an insurance policy for the anticipated cost of the impact.
B. Eliminate that part of the project.
C. Outsource that part of the project to another company.
D. Provide the team with training on conflict resolution techniques.

Answer 20

The correct answer is D.