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PMP Exam prep > Project Management Basics - 11. Project Risk Management > Flashcards

Project Management Basics - 11. Project Risk Management Flashcards

1
Q

The risk management plan generally includes all of the following EXCEPT:

a. Risk strategy
b. Responses to individual risks
c. Risk categories
d. Methodology

A

b. Responses to individual risks

The risk management plan may include some or all of the following elements:

  • Risk strategy,
  • Methodology,
  • Roles and responsibilities,
  • Funding,
  • Timing,
  • and Risk categories

See Section 11.1.3.1 Risk Management Plan

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2
Q

Which of the following is an input of the Plan Risk Management process?

a. Work performance reports
b. Work performance data
c. Project charter
d. Procurement documentation

A

c. Project charter

Plan Risk Management: Inputs:

  • Project Charter,
  • Project management plan (all component),
  • Project documents (stakeholder register),
  • Enterprise environmental factors,
  • and organizational process assets.

See Figure 11-2 Plan Risk Management: Inputs, Tools & Techniques, and Outputs

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3
Q

When is the Plan Risk Management process performed in a project?

a. During the initiating stage of the project
b. Once or at predefined points in a project
c. During the executing stage of the project
d. Continously throughout the project

A

b. Once or at predefined points in a project

The process is part of the Planning Process Group and is the time in the life cycle required to establish the scope of the project, refine the objectives, and define the course of action required to attain the project objectives. This process is performed once or at predefined points in the project.

For more information, See Section 11.1

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4
Q

The Perform Qualitative Risk Analysis
process assesses the priority of
identified risks using all of the following
EXCEPT:

a. Relative probability or likelihood of occurrence of identified risks
b. Risk perceptions and biases
c. Impact on project objectives if the identified risks occur
d. A mathematical technique, such as the expected monetary value ( EMV ) ,to create the impression of precision and accuracy

A

d. A mathematical technique, such as the expected monetary value ( EMV ) ,to create the impression of precision and accuracy

Perform Qualitative Risk Analysis is the process of prioritizing individual project risks for further analysis or action by assessing their probability of occurrence and impact as well as other characteristics. Risk perception introduces bias into the assessment of identified risks, so attention should be paid to identifying bias and correcting for it.

See Section 11.3 Perform Qualitative Risk Analysis

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5
Q

What is an output of the Perform
Qualitative Risk Analysis process?

a. Risk categorization
b. Change requests
c. Probability and impact matrix
d. Project document updates

A

d. Project document updates

Perform Qualitative Risk Analysis: Outputs: project documents updates (assumption log, issue log, risk register, risk report).

See Figure 11-8 Perform Qualitative Risk Analysis: Inputs, Tools & Techniques, and Outputs

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6
Q

Risk probability and impact assessments consider the likelihood that a risk will occur and its potential effect on project objectives respectively. Which of the following characteristics further describe this data analysis technique?

a. The impact on project objectives should be assessed primarily at the end of the project, as part of the lessons learned.
b. The probability of risks should be estimated by using financial metrics.
c. The level of probability and its impact on each objective are evaluated during interviews or meetings.
d. Risk impact is assessed more thoroughly than risk probability, to measure the degree of change expected from each risk

A

c. The level of probability and its impact on each objective are evaluated during interviews or meetings.

In risk impact assessment: Probability and impact are assessed for each identified individual project risk. Risks can be assessed in interviews or meetings with participants familiar with the types of risk. The level of probability for each risk and its impact on each objective are evaluated during the interview.

See Section 11.3.2.3 Data Analysis

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7
Q

Which of the following is the best
definition of the Perform Qualitative
Risk Analysis process?

a. Amodel that simulates the combined effects of individual project risks and other sources of uncertainty to evaluate their potential impact
b. A mathematical technique such as the expected monetary value ( EMV ), to create the impression of precision and
accuracy
c. Prioritizing individual project risks for further analysis or action by assessing their probability of occurrence and impact
d. Numerically analyzing the combined effects of identified individual project risks and other sources of uncertainty on overall project objectives

A

c. Prioritizing individual project risks for further analysis or action by assessing their probability of occurrence and impact

Perform Qualitative Risk Analysis is the process of prioritizing individual project risks for further analysis or action by assessing their probability of occurrence and impact as well as other characteristics. Risk perception introduces bias into the assessment of identified risks, so attention should be paid to identifying bias and correcting for it.

See Section 11.3 Perform Qualitative Risk Analysis

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8
Q

Which of the following is a tool and
technique used in the Perform
Qualitative Risk Analysis process?

a. Risk management plan
b. Risk categorization
c. Risk register
d. Risk report

A

b. Risk categorization

Perform Qualitative Risk Analysis: Tools and Techniques:

  • Expert judgment,
  • Data gathering (interviews),
  • Data analysis (risk data quality assessment (risk probability and impact assessment, assessment, assessment of other risk parameters),
  • Interpersonal and team skills (Facilitation),
  • Risk categorization,
  • Data representation ( probability and impact matrix, hierarchical charts),
  • and meetings,

See Figure 11-8 Perform Qualitative Risk Analysis: Inputs, Tools & Techniques, and Outputs

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9
Q

All of the following are characteristics of a decision tree EXCEPT:

a. Use expected monetary(EVM) analysis to calculate the expected outcome for scenarios that may or may not happen.
b. It is a risk analysis tool that can be used to create an estimated monetary from a particular set of decisions.
c. It is a diagramming and calculation technique for evaluating the implications of a chain of multiple options in the presence of uncertainty.
d. Is primarily a qualitative risk analysis technique and is not generally used in quantitative risk analysis.

A

d. Is primarily a qualitative risk analysis technique and is not generally used in quantitative risk analysis.

Decision tree analysis is a diagramming and calculation technique for evaluating the implications of a chain of multiple options in the presence of uncertainty. The decision tree is evaluated by calculating the expected monetary value of each branch, allowing the optimal path to be selected.

See Section 11.4.2.5 Data Analysis

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10
Q 
Risk probability and impact
assessments consider the likelihood
that a risk will occur and it's potential
effect on project objectives
respectively. Which of the following
characteristics further describe this
data analysis technique?

a. The impact on project objectives should be
assessed primarily at the end of the project, as part of the lessons learned
b. Risk impact is assessed more thoroughly than risk
probability, to measure the degree of change expected from each risk
c. The level of probability and its impact on each
objective are evaluated during interviews or
meetings.
d. The probability of risks should be estimated by
using financial metrics

A

c. The level of probability and its impact on each
objective are evaluated during interviews or
meetings.

In Risk impact assessment: Probability and impact are assessed for each identified individual project risk. Risks can be assessed in interviews or meetings with participants familiar with the types of risk. The level of probability for each risk and its impact on each objective are evaluated during the interview.

See Section 11.3.2.3 Data Analysis

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11
Q

Which of the following is the best definition of the Perform Qualitative Risk Analysis process?

a, Numerically analyzing the combined effects of identified individual project risks and other sources of uncertainty on overall project objectives

b. Prioritizing individual project risks for further analysis or action by assessing their probability of occurrence and impact.
c. A model that simulates the combined effects of individual project risks and other sources of uncertainty to evaluate their potential impact
d. A mathematical technique such as the expected monetary value ( EMV ), to create the impression of precision and accuracy

A

b. Prioritizing individual project risks for further analysis or action by assessing their probability of occurrence and impact.

Perform Qualitative Risk Analysis is the process of prioritizing individual project risks for further analysis or action by assessing their probability of occurrence and impact as well as other characteristics. Risk perception introduces bias into the assessment of identified risks, so attention should be paid to identifying bias and correction for it.

See Section 11.3 Perform Qualitative Risk Analysis

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12
Q

Tools and techniques of the Perform
Quantitative Risk Analysis process
include:

a. Interviewing, historical results, workarounds, and
Risk Analysis development
b. Expert judgment, data gathering, simulations, and decision tree analysis.
c. Contracting, contingency planning, alternative
strategies and insurance
d. Checklists. damage control reports, standard
allowances, and inspection

A

b. Expert judgment, data gathering, simulations, and decision tree analysis.

Perform Qualitative Risk Analysis: Tools & Techniques:

  • Expert Judgment,
  • Data gathering (Interviews),
  • Interpersonal and team skills (facilitation),
  • Representations of uncertainty,
  • Data analysis (simulations sensitivity analysis, decision tree analysis, influence diagrams)

See Figure 11-11 Perform Quantitative Risk Analysis: Inputs, Tools & Techniques, and Outputs.

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13
Q

As an output of the Perform Quantitative Risk Analysis process, project documents are updated. One such update is:

a.Direction, resources, and contingency costs
b. Qualitative analysis of the threats to ignore and
opportunities to accept
c. Prioritized list of individual project risks.
d. Checklists, corrective actions, and qualified decision trees

A

c. Prioritized list of individual project risks.

Project documents are outputs for this process and include the risk report. The risk report will be updated to reflect the results of the quantitative risk analysis. This will typically include:

  • Assessment of overall project risk exposure,
  • detailed probabilistic analysis of the project,
  • prioritized lists of individual project risks,
  • Trends in quantitative risk analysis results,
  • and recommended Risk Analysis.

See Section 1.1.4.3.1 Project Documents Updates

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14
Q

Which of the following best describes a
decision tree?

a. A graphical, qualitative risk analysis technique and not generally used in quantitative risk analysis
b. Displavs the calculated correlation coefficients for each element of the quantitative risk analysis model
c. Used to support the selection of the best of several alternative courses of action.
d. A diagram that represents a project or situation within the project as a set of entities, outcomes, and influences, together with the relationships between them

A

c. Used to support the selection of the best of several alternative courses of action.

Decision tree analysis is a diagramming and calculation technique for evaluating the implications of a chain of multiple options in the presence of uncertainty. Decision trees are used to support the selection of the best of several alternative courses of action. The decision tree is evaluated by calculating the expected monetary value of each branch, allowing the optimal path to be selected.

See Section 11.4.2.5 Data Analysis

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15
Q

Which of the following data analysis techniques help to determine which individual project risks or other sources of uncertainty have the most potential impact on project outcomes?

a. Sensitivity analysis
b. Influence diagrams
c. Simulations
d. Decision tree analysis

A

a. Sensitivity analysis

Sensitivity analysis helps to determine which individual project risks or other sources of uncertainty have the most potential impact on project outcomes. It correlates variations in project outcomes with variations in elements of the quantitative risk analysis model.

See Section 11.4.2.5 Data Analysis

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16
Q

Risk transference nearly often involves:

a. Accepting a lower profit if some activities overrun
their budget
b. Policies and procedures for a response system.
c. Eliminating risk through beta testing
d. Payment of a risk premium to the party taking on
the risk

A

d. Payment of a risk premium to the party taking on
the risk

Transfer involves shifting ownership of a threat to a third party to manage the risk and to bear the impact if the threat occurs. Risk transfer often involves payment of a risk premium to the party taking on the threat. Transfer can be achieved by a range of actions, which may include the use of insurance, performance bonds, etc,

See Section 11.5.2.4 Strategies for Threat

17
Q

Outputs from the Plan Risk Responses
process include all of the following
EXCEPT:

a. Corrective actions
b. Project documents updates
c. Project management plan updates
d. Change requests

A

a. Corrective actions

Plan Risk Responses-Outputs:

  • Change requests,
  • Project management plan updates (schedule management plan, cost management plan, quality management plan, resource management plan, procurement management plan, scope baseline, schedule baseline, cost baseline),
  • Project document updates ( assumption log, cost forecasts, lessons learned register, project schedule, project team assignments, risk register, risk report).

See Figure 11-16 Plan Risk Responses: Inputs, Tools & Techniques, and Outputs

18
Q

Which of the following are some strategies used to deal with project negative risks?

a. Transfer, interpret, and reject
b. Interpret , avoid, and transfer
c. Enhance , exploit, and reject
d. Avoid, escalate, and accept

A

d. Avoid, escalate, and accept

Five alternative strategies may be considered for dealing with threats, as follows:

  • Escalate,
  • Avoid,
  • Transfer,
  • Mitigate,
  • Accept.

See Section 11.5.2.4 Strategies for Threat

19
Q

Which of the following strategies for threats involves payment of a risk premium to the party taking on the threat?

a. Transfer
b. Escalate
c. Avoid
d. Mitigate

A

a. Transfer

Transfer involves shifting ownership of a threat to a third party to manage the risk and to bear the impact if the threat occurs. Risk transfer often involves payment of a risk premium to the party taking on the threat. Transfer can be achieved by a range of actions, which may include the use of insurance, performance bonds, etc,

See Section 11.5.2.4 Strategies for Threat

20
Q

In the Plan RiSK Responses process, an accept strategy for a negative risk or threat indicates that the project team has decided:

a. Not to change the project management plan to deal with a risk, or is unable to identify any other suitable response strategy.
b. To purchase insurance, or to require performance bonds, warranties, and guarantees.
c. To agree with the project manager.
d. To eliminate a specific nsk or threat, to reduce the probability and / for impact of an adverse risk event to be within acceptable threshold limits, or to pursue an opportunity actively

A

a. Not to change the project management plan to deal with a risk, or is unable to identify any other suitable response strategy.

Risk acceptance acknowledges the existence of a threat, but no proactive action is taken. This strategy may be appropriate for low-priority threats, and it may also be adopted where it is not possible or cost-effective to address a threat in any other way.

See Section 11.5.2.4 Strategies for Threat

21
Q

Which of the following tools and techniques are used in the Implement Risk Responses process?

a. Meetings
b. Interpersonal and team skills
c. Data gathering
d. Data analysis

A

b. Interpersonal and team skills

Implement Risk Responses: Tools & Techniques:

  • Expert judgment;
  • Interpersonal and team skills (influencing);
  • Project management information system (PMIS).

For more information, see Figure 11-18. Implement Risk Responses: Inputs, Tools & Techniques, and Outputs

22
Q

All of the following are inputs to the implement Risk Responses process EXCEPT:

a. Project documents
b. Organizational project assets
c. Project management plan
d. Issue log

A

d. Issue log

Implement Risk Responses-Inputs:

  • Project management plan (Risk management plan),
  • Project documents ( Lessons learned register, risk register, risk report),
  • and Organizational process assets.

See Figure 11-18. Implement Risk Responses: Inputs, Tools & Techniques, and Outputs

23
Q

The Implement Risk Responses process ensures that agreed-upon risk responses are executed as planned in order to do what?

a. Address overall project risk exposure, minimize individual project threats, and maximize individual project opportunities.
b. Minimize overall project risk exposure, avoid individual project threats, and control individual project opportunities
c. Respond to overall project risk by analyzing the high-level outcomes of the project
d. Respond to individual project risk by taking advantage of only opportunities

A

a. Address overall project risk exposure, minimize individual project threats, and maximize individual project opportunities.

The key benefit of this process is that it ensures that agreed-upon risk responses are executed as planned in order to address overall project risk exposure, minimize individual project threats, and maximize individual project opportunities.

For more information, see Section 11.6

24
Q

Which of the following project documents are updated as a result of the Implement Risk Responses process?

a. Risk Register
b. Requirements documentation
c. Assumption log
d. Stakeholder register

A

a. Risk Register

Implement Risk Responses: Outputs:

  • Change requests;
  • project document updates (issue log, lessons learned register, project team assignments, risk register, risk report).

For More information, See Figure 11-18. Implement Risk Responses: Inputs, Tools & Techniques, and Outputs

25
Q

The outputs from the Monitor Risks process include all of the following EXCEPT:

a. Work breakdown structure ( WBS )
b. Change requests
c. Project documents updates
d. Project management plan updates

A

a. Work breakdown structure ( WBS )

Monitor Risks-Outputs:

  • Work performance information,
  • Change requests,
  • Project management plan updates (any component),
  • Project Documents updates ( assumption log, issue log, lessons learned register, risk register, risk report),
  • and organizational assets updates.

See Figure 11-20 Monitor Risks: Inputs, Tools & Techniques, and Outputs

26
Q

What is used to consider the effectiveness of the risk management process?

a. Risk Audit
b. Risk Review
c. Risk Response Analysis
d. Risk Registration

A

a. Risk Audit

Risk audits are a type of audit that may be used to consider the effectiveness of the risk management process. The project manager is responsible for ensuring that risk audits are performed at an appropriate frequency, as defined in the project’s risk management plan.

For more information, see Section 11.7.2.2

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