Knowledge Area Test: Project Risk Management Flashcards
- Your project is currently in planning and currently you are focusing on risk planning. During a risk identification workshop, one of the key project stakeholders asks you for probability and impact analysis of the identified risk. You tell him that this analysis will follow the risk identification workshops. During which stage of risk planning are risks prioritized based on their relative probability and impact?
Perform Qualitative risk analysis
Perform Qualitative Risk Analysis assesses the impact and likelihood of identified risks. During this process, the risks are prioritized based on their relative probability and impact. [PMBOK® Guide 6th edition, Page 419]
- A project manager has decided to use a decision tree to do a build or upgrade analysis. The build requires an investment of $200M. On the build decision branch, there is a 60 percent probability of strong demand (yielding a revenue of $400M) and a 40 percent probability of weak demand (yielding a revenue of $150M). What is the expected monetary value (EMV) of the build?
$100M
The payoff for the strong demand scenario is $400M - $200M = $200M (since the initial investment is $200M). The payoff for the weak demand scenario is $150M - $200M = - $50M. Therefore, the EMV is computed as: (0.6 * 200) + (0.4 * -50), where 0.6 represents the 60% probability of the strong demand scenario and 0.4 represents the 40% probability of the weak demand scenario. 120 - 20 = 100. Therefore, the expected monetary value is $100M. [PMBOK® Guide 6th edition, Page 435]
- Melissa, a junior project manager in your firm, is currently managing a hardware deployment project. She has recently created a risk management plan for this project and has requested a review and feedback from you. You found out that some sections of the plan are irrelevant. Which of the following would not be included in this plan?
Templates
Templates is not a valid response. The other choices are typical components of a Risk Management Plan. [PMBOK® Guide 6th edition, Page 405]
- You are helping a team tailor project management processes for an upcoming project. The team is not sure if Perform Qualitative Risk Analysis process should be enough on the project or if Perform Quantitative Risk Analysis process will also need to be applied. In general, Perform Qualitative Risk Analysis is:
Focused on high-priority risks
Perform Qualitative Risk Analysis is quicker than Perform Quantitative Risk Analysis as it focuses on high-priority risks. [PMBOK® Guide 6th edition, Page 419]
- You have been nominated by your organization to participate in a conference to talk about efficient risk management strategies. Since risk management is more of an art than science, there is no one way to identify and manage project risks. Which of the following should you recommend regarding risk estimations during your speech?
All risks do not have to be quantitatively assessed.
Here we have to identify the correct statement. It is true that not all project risks have to be quantitatively assessed, as in a number of projects, risks are only qualitatively assessed. There is no standard threshold for accepting risks and this varies from project to project. Overall project risk includes the individual project risks and risks include both negative risks and positive risks. [PMBOK® Guide 6th edition, pages 397, 428]
- Robert is managing a robotic process automation project. A number of project risks were identified during a risk review meeting and corresponding risk management strategies were planned. Robert now wants to assign a risk owner for each project risk for which a risk response action is planned. Where must he update this information?
Risk register
The assigned risk owners are documented in the risk register. [PMBOK® Guide 6th edition, Page 413]
- You are automating a manual business workflow. The system has to integrate with some legacy system which lacks documentation. The project team is hesitant in reviewing and editing the source code of this legacy system as the system is already in production. This risk was never considered earlier and it was assumed that you will face no issues during the integration. What needs to be done now?
A detailed risk assessment
A major assumption was made earlier. Now once the risk has been identified, this needs to be analyzed in detail and an appropriate response strategy needs to be planned. [PMBOK® Guide 6th edition, page 439]
- You are in the middle of a risk assessment meeting with key stakeholders, customers and project team leaders. While identifying and assessing risks, you realize that two key stakeholders are overemphasizing the impact of a risk. What is the best step to take to avoid unfairness or bias when assessing risks?
Engage a neutral facilitator to support the Perform Qualitative Risk Analysis process.
Engaging a neutral facilitator to support the Perform Qualitative Risk Analysis process should help address bias. [PMBOK® Guide 6th edition, Page 420]
- You have recently taken over a project in execution. To your surprise, the previous project manager didn’t pay much attention to risk management. As a result, a number of project issues are now popping up and the project team is in a fire fighting mode. You now want to start the risk management process on this project and the first question that arises is who is going to identify the project risks?
All project personnel
While it is not feasible to invite everyone to the risk identification meetings, everyone should be encouraged to identify risks as they encounter them. [PMBOK® Guide 6th edition, Page 411]
- Acceptance is a strategy adopted because it is not possible to eliminate all risks from a project. This strategy indicates that the project management team has decided not to change the project management plan to deal with a risk. What action does passive acceptance require?
Passive acceptance requires no proactive action except periodic review of the threat.
Acceptance is a strategy adopted because it is not possible to eliminate all risks from a project. This strategy indicates that the project management team has decided not to change the project management plan to deal with a risk. Passive acceptance requires no action except performing periodic review of the threat. [PMBOK® Guide 6th edition, Page 443]
