PROJECT RISK MANAGEMENT Flashcards
As the project manager, you have directed your project team to identify any new project risks and close out any identified risks that are outdated. In which of the following activities are they involved?
a. Risk analysis
b. Risk mitigation
c. Trend analysis
d. Risk reassessment
D
The best answer choice is D because the project team is reassessing the project risks.
An analysis technique used to determine which individual project risks or other sources of uncertainty have the most potential impact on project outcomes is which of the following? Also, what chart is used to communicate the relative importance of the variables?
a. EMV, a decision tree
b. Sensitivity analysis, a Tornado diagram
c. Monte Carlo simulation, a probability distribution
d. Expert judgment, a decision tree
B
A sensitivity analysis helps determine which risks have the most potential impact on a project, and the Tornado diagram is a visual display of the information.
There is an analysis technique where a computer model is iterated many times and input values are randomly chosen for each iteration and driven by the input data, including probability distributions and probabilistic branches. The outputs then represent the range of possible outcomes for a project. This tool that involves iterative simulations is called:
a. Decision tree analysis
b. Beta distribution
c. PERT analysis
d. Monte Carlo simulation
D
Simulations are typically performed using the Monte Carlo technique
Sharon is using a technique to prioritize the risks in her project. She will use this as a guide for her risk response activities. Which of the following describes what Sharon is using?
a. Responsibility Assignment Matrix
b. Risk probability and impact matrix
c. Risk register
d. Risk mitigation chart
B
The best answer choice is B. The risk probability and impact matrix is a technique used in qualitative
risk analysis for prioritizing risks and serving as a guide for risk responses.
Your project team has been reassessing the project risks and are documenting the results of that review. Which of the following documents need to be updated to reflect this new information?
a. WBS dictionary
b. Lessons learned
c. Risk register
d. Scope baseline
C
The best answer choice is C because risk reassessment and review results are documented in the risk register.
You are managing a new project with a $100,000 budget. You have identified one major risk that has a 20% chance of materializing and resulting in a $25,000 negative impact on the project. A risk expert has provided a suggestion for a risk response that would cut the probability of this risk in half, resulting in a 10% chance of occurring. At the same time, the impact of this risk would be reduced to only $15,000. Which of the following represents the remaining 10% risk?
a. Transferable risk
b. Mitigated risk
c. Residual risk
d. Unidentified risk
C
The best answer choice is C because residual risk is defined as the risk remaining after risk responses
have been implemented.
Carl is involved in the Plan Risk Management process. He has completed risk categories and the roles and
responsibilities related to the identified risks. From the choices below, select the ultimate destination for these documents.
a. Enterprise environmental factors
b. Lessons learned
c. Qualitative risk analysis
d. Organizational process assets
D
The best answer choice is D. The data and documents Carl has compiled will become a part of the Organizational process assets.
Which of the following is a visualization tool for categorizing the potential causes of a problem in order to identify the source of risks?
a. An impact grid
b. A root-cause analysis
c. A process flowchart
d. A scatter diagram
B
A root-cause analysis is used to identify sources of risks.
What best describes the degree of uncertainty an entity is willing to take on?
a. Risk threshold
b. Overall project risk
c. Risk appetite
d. Known risk
C
Risk appetite is the degree of uncertainty an entity is willing to take on.
Following a planning session with the project team, you decide to have a separate meeting where the team can evaluate risks from the perspective of external opportunities and threats along with internal strengths and weaknesses. This technique is formally called:
a. SWOT analysis
b. Root-cause analysis
c. Focused brainstorming
d. Assumptions analysis
A
A SWOT analysis looks both inside and outside an organization for threats and opportunities.
SWOT risk analysis is a technique used in risk management. Which of the following terms comprise the acronym for SWOT risk analysis?
a. Strategy, work, opinions, techniques
b. Strengths, weaknesses, opportunities, threats
c. Strengths, weaknesses, opinions, tactics
d. Special work operations team
B
The best answer choice is B. SWOT stands for strengths, weaknesses, opportunities, and threats.
Judy is involved in a quantitative risk analysis for her project. She needs to determine which risks have the
most potential impact on her project, and has decided to conduct a sensitivity analysis to identify these risks.
Which of the following diagrams will Judy create in order to get the information she needs?
a. Hurricane diagram
b. Monte Carlo technique
c. Tornado diagram
d. Mitigation analysis
C
The best answer choice is C. The Tornado diagram is used in sensitivity analysis for comparing the
relative importance of the variables.
During a recent risk audit, you discovered that your risk responses have not been as effective as initially
believed. In order to get things back under control, you have developed a contingency plan. What is necessary in order to implement this plan?
a. An additional risk audit using the contingency plan as the basis
b. A change request
c. Additional funding
d. A new schedule baseline
B
The best answer choice is B. In order to make any change to the project, a change request is necessary.
Wanda is trying to determine the best approach for analyzing the cost risk analysis in her project and
translating it into the potential impact on the project objectives. Which of the following would help Wanda
determine this?
a. Tornado diagram
b. Sensitivity analysis
c. Monte Carlo simulation
d. Ishikawa diagram
C
The best answer choice is C. The Monte Carlo simulation would provide Wanda with a number of iterations she could use to determine the impact.
Victor works as a project manager for a government agency that constructs interstate highway systems. When Victor began working on his project schedule, he decided to use the Critical Chain Method because he determined it would be in the best interest of the project to assume that weather delays might be a possibility. Because of this, Victor incorporated a 30-day buffer into the project schedule. Recent weather data has proven his adverse weather assumptions to be false. Based on the new information, which of the following processes should Victor perform to remove the outdated risk assumptions?
a. Update Procurement documents
b. Update project scope
c. Revise the project charter
d. Update risk register
D
The best answer choice is D. Any outdated assumptions related to risk must be updated. The project charter cannot be updated once established. Project scope is only updated as the result of scope changes. The procurement documents is not a valid choice.
