Project Risk Management (14)

Question 1

What is the objective of Risk Management?

Answer 1

• Increase the probability and impact of positive events
• Decrease the probability and impact of negative events in the project

Question 2

What are the Sub-processes within the Planning Process Group for Project Risk Management?

Answer 2

• Plan Risk Management
• Identify Risks
• Perform Qualitative Risk Analysis
• Perform Quantitative Risk Analysis
• Plan Risk Responses

Question 3

What are the Sub-processes within the Executing Process Group for Project Risk Management?

Answer 3

Implement Risk Response

Question 4

What are the Sub-processes within the Monitor & Control Process Group for Project Risk Management?

Answer 4

Monitor Risks

Question 5

View the list of Risk Concepts and familiarize:

Answer 5

• Uncertain event or condition that has a positive or negative impact on project objectives (time, cost, scope, or quality)
• Risk can be known or unknown
• Known Risks can be handled with a plan
• Unknown Risks cannot be managed proactively. It is handled by management contingency (reserve)
• Factors that characterize risk are risk events, probability of impact and amount at stake
• Risk can be pure risk (these risks are insurable) and Business Risk (Profit/loss)
• Risk can be positive one or negative one
• Utility function/utility theory is used to measure stakeholder risk tolerance

Question 6

What is Risk Appetite?

Answer 6

The level of risk that an organization is prepared to accept, before action is deemed necessary to reduce it

Question 7

What is Risk Tolerance?

Answer 7

The degree of variability in investment returns that an individual is willing to withstand

Question 8

What is Risk Threshold?

Answer 8

The amount of risk that is acceptable to an organization

Question 9

What is Risk Aversion?

Answer 9

Is the reluctance of a person to accept the risk

Question 10

What is the purpose of Plan Risk Management?

Answer 10

Deciding how to approach, plan and execute the risk management activities for a project

Question 11

What are the plan risk management inputs?

Answer 11

(Planning)

• Project Management Plan
• Project Charter
• Stakeholder Register
• Enterprise Env Factors
• Organizational Process Assets

Question 12

What are the plan risk management tools and techniques?

Answer 12

• Analytical techniques
• Expert Judgement
• Meetings

Question 13

What are the plan risk management outputs?

Answer 13

Risk Management Plan

Question 14

Whats included in the Risk Management Plan?

Answer 14

• Methodology
• roles and responsibilities
• budgeting
• timing
• risk categories
• definition of risk probability and impact
• probability and impact matrix
• reporting formats
• tracking
• stakeholders risk tolerances

Question 15

What is the process of Identify Risks?

Answer 15

Identifying and documenting characteristics of risk that might affect the project

Question 16

Define Qualitative Risk Analysis?

Answer 16

(planning process group)

Prioritizing risks and assessing their probability of occurrence and impact. Subjective in nature (low, med, high)

Question 17

Define Quantitative Risk Analysis?

Answer 17

(Planning process group)

Performed on risks that have been prioritized by the perform qualitative analysis. It analyzes the effect of those risk events and assigns a numerical rating.

Question 18

Define Plan Risk Responses?

Answer 18

The process of developing options and actions to enhance the opportunities and to reduce threats to project objectives.

Question 19

What are the strategies of Negative Risk?

Answer 19

• Avoidance
• Transfer/Deflection
• Mitigation
• Acceptance
• Escalate

Question 20

What are the strategies of Positive Risk?

Answer 20

• Exploit
• Share
• Enhance
• Acceptance
• Escalate

Question 21

What is Risk Avoidance?

Answer 21

Changing the project management plan to reduce the threat and protect project objectives

Question 22

What is Risk Transfer/Deflection?

Answer 22

Shifting the negative impact of a threat and ownership of the response to a third party (i.e.. insurance on a car)

Question 23

What is Risk Mitigation?

Answer 23

Reduce the probability and/or consequences of adverse risks to under acceptable thresholds. (i.e.. having an umbrella is mitigation against rain)

Question 24

What is Risk Acceptance?

Answer 24

Passive or Active acceptance.

No change to the Project Management Plan

Question 25

What is Risk Escalate?

Answer 25

Escalating project risks to a appropriate level based on the roles and responsibilities of the project manager and stakeholders

Question 26

What is Risk Exploit?

Answer 26

Organization wishes to ensure that the opportunity is realized

Question 27

What is Risk Share?

Answer 27

Allocate ownership to a third party to capture opportunity (i.e. joint ventures, alliances)

Question 28

What Is Risk Enhance?

Answer 28

Modify the “size” of an opportunity by increasing probability and/or positive impacts

Question 29

Define Implement Risk Responses?

Answer 29

(Executing Process Group)

Ensures that agreed-upon risk responses are executed as planned to address overall project risk exposure, minimize the project threats, and maximize the project opportunities.

Question 30

Define Monitor Risks?

Answer 30

(Monitor & Controlling)

Process of monitoring the implementation of risk response plan, identifying and analyzing newly arising risks, keeping track of identified risks, residual risk, secondary risks, and the risk process effectiveness throughout the project

Question 31

What is Secondary Risk?

Answer 31

Risks that arise as a direct result of implementing a risk response/primary risk response (ex: side effect)

Question 32

What is Residual Risk?

Answer 32

Those that remain after avoidance, transference, or mitigation responses have been taken (ex: left over)

Question 33

What is Fallback Plan?

Answer 33

Is Plan - B, if the risk has a high impact, or the primary response proves to be inadequate