BUS 377 Chapter 2

Which of the following are the elements of the risk management plan? Each correct answer represents a complete solution. Choose all that apply.

Probability and impact matrix Revised stakeholder tolerances Budgeting According to the PMBOK guide, the risk management plan should include the following elements: Methodology: Methodology defines the approaches, tools, and data sources that will be used to perform risk management on the project. Roles and responsibilities: Roles and responsibilities describe the people who are responsible for managing the identified risks and their responses for each type of activity identified in the risk management plan. These risk teams might not be the same as the project team. Risk analysis should be unbiased, which might not be possible when project team members are involved. Budgeting: Budgeting estimates funds needed, based on assigned resources, for inclusion in the cost baseline and establishes protocols for application of contingency and management reserves. Timing: Timing documents the timing of the risk management processes and includes the activities associated with risk management in the project schedule. Risk categories: Risk categories are a way to systematically identify risks and provide a foundation for understanding. When determining and identifying risks, the use of risk categories helps improve the process by giving everyone involved a common language or basis for describing risk. Risk categories should be identified during this process and documented in the risk management plan. These categories will assist you in making sure the next process, Identify Risks, is performed effectively and produces a quality output. The following list includes some examples of the categories you might consider during this process: Technical, quality, or performance risks: Include risks associated with unproven technology, complex technology, or changes to technology anticipated during the course of the project. Performance risks might include unrealistic performance goals. Perhaps one of the project deliverables concerns a component manufactured to specific performance standards that have never been achieved. That's a performance risk. Project management risks: Includes improper schedule and resource planning, poor project planning, and improper or poor project management disciplines or methodologies. Organizational risks: Include resource conflicts because of multiple projects occurring at the same time in the organization; scope, time, and cost objectives that are unrealistic given the organization's resources or structure; and lack of funding for the project or diverting funds from this project to other projects. External risks: Includes those aspects that are external to the project, such as new laws or regulations, labor issues, weather, changes in ownership, and foreign policy for projects performed in other countries. Catastrophic risks—known as force majeure—are usually outside the scope of Plan Risk Management and instead require disaster recovery techniques. Force majeure includes events such as earthquakes, meteorites, volcanoes, floods, civil unrest, terrorism, and so on. Definitions of risk probability and impact: Probability describes the potential for the risk event occurring, whereas impact describes the effects or consequences the project will experience if the risk event occurs. Probability and impact matrix: A probability and impact matrix prioritizes the combination of probability and impact scores and helps you determine which risks need detailed risk response plans. Revised stakeholder tolerances: Stakeholders' tolerances, as they apply to the specific project, may be revised in the plan risk management process. Reporting formats: Reporting formats describe the content of the risk register and the format of this document. Tracking: Tracking includes a description of how to document the history of the risk activities for the current project and how the risk processes will be audited. Lists of risks are incorrect. The lists of risks are documented within the risk register, which is created in the process following risk management planning. The risk management plan helps in guiding the processes, including how to go about identifying risks, but does not document the actual risks. 1. Domain 1: Risk Strategy and Planning 1.1. Task 1 Develop risk assessment processes and tools that quantify stakeholder risk tolerances in order to assess and determine risk thresholds for the project and set criteria for risk levels.

Which of the following involves identifying and minimizing the effect of risks?

Risk plan 1. Domain 1: Risk Strategy and Planning 1.3. Task 3 Develop and recommend project risk strategy based on project objectives in order to establish the outline for the risk management plan.

What is the role of the risk management function?

Setting policy and strategy for risk management 1. Domain 1: Risk Strategy and Planning 1.3. Task 3 Develop and recommend project risk strategy based on project objectives in order to establish the outline for the risk management plan.

What is the major goal of risk management in the decision-making process?

To manage the uncertainty 1. Domain 1: Risk Strategy and Planning 1.1. Task 1 Develop risk assessment processes and tools that quantify stakeholder risk tolerances in order to assess and determine risk thresholds for the project and set criteria for risk levels.

A project team member has just identified a new project risk. The risk event is determined to have a significant impact but a low probability in the project. If the risk event happens, it will cause the project to be delayed by three weeks, which will cause new risk in the project. What should the project manager do with the risk event?

Add the identified risk to the risk register. All identified risks, their characteristics, responses, and their status should be added and monitored as part of the risk register. A risk register is a document that contains the results of qualitative and quantitative risk analyses and risk response planning. Description, category, cause, the probability of occurrence, impact on objectives, proposed responses, owner, and current status of all identified risks are entered in the risk register. Add the identified risk to the low-level risk watchlist is incorrect. Risks that have a low probability and a low impact may go on the low-level risk watchlist. Add the identified risk to the issues log is incorrect. This is a risk event and should be recorded in the risk register. Add the identified risk to a quality control management control chart is incorrect. Control charts are not where risk events are recorded.

Which of the following risk management methods is the conversion of risk data into risk decision-making information?

Analyze Following are the risk management methods: Identify: It identifies and characterizes threats. Analyze: It is the conversion of risk data into risk decision-making information. Plan: It involves developing actions for addressing individual risks, prioritizing risk actions, and creating an integrated risk management plan. Track: It consists of monitoring the status of risks and the actions taken to enhance them. Control: It corrects deviations from planned risk actions. Communicate: It is the process of exchanging information and views about risks. Reference: "Project Management Body of Knowledge (PMBOK Guide)" 1. Domain 1: Risk Strategy and Planning 1.5. Task 5 Establish evaluation criteria for risk management processes based on project baselines and objectives in order to measure effectiveness of the project risk process.

You are the project manager for the TTP project. You are in the Identify Risks process. You have to create the risk register. Which of the following are included in the risk register? Each correct answer represents a complete solution. Choose all that apply.

List of potential responses List of identified risks A risk register is a document that contains results of qualitative and quantitative risk analyses and risk response planning. Description, category, cause, the probability of occurrence, impact on objectives, proposed responses, owner, and current status of all identified risks are entered in the risk register. Risk register primarily contains the following: List of identified risks: A reasonable description of the identified risks is noted in the risk register. The description includes event, cause, effect, impact related to the risks identified. In addition to the list of identified risks, the root causes of those risks may appear in the risk register. List of potential responses: Potential responses to a risk may be identified during the identify risks process. These responses are useful as inputs to the plan risk responses process.

Question 18 :All of the following are included in the risk registers except for which one?

Network diagram analysis of critical path activities 4. Domain 4: Risk Monitoring and Reporting 4.7. Task 7 Capture risk lessons learned through comprehensive review of the project risk management plan, risk register, risk audits, risk process performance reports, and other associated reports in order to incorporate into future risk planning.

Which of the following is the process of defining the way to conduct the risk management activities?

Plan risk management Plan risk management is the process of defining the way to conduct the risk management activities. Planning is essential for providing sufficient resources and time for risk management activities, and to establish an agreed-upon basis of evaluating risks. This process should start as soon as project is conceived and should be completed early during project planning. Perform qualitative risk analysis - This process estimates the overall probability for risks to occur and their impact and prioritizes them accordingly for further analysis. Perform quantitative risk analysis - This process analyzes numerically the effect of identified risks on meeting the project objectives. Plan risk responses - This process prepares a risk response plan for increasing the positive impact and decreasing the negative impact of risks on the project.

Which of the following processes included in risk management decides how risk management activities for the project at hand will be performed?

Plan risk management The following are the processes included in risk management: Plan risk management: This process decides how risk management activities for the project at hand will be performed. Identify risks: This process identifies and documents risks that might occur for a given project. Perform qualitative risk analysis: This process estimates the overall probability for risks to occur and their impact and prioritizes them accordingly for further analysis. Perform quantitative risk analysis: This process analyzes numerically the effect of identified risks on meeting the project objectives. Plan risk responses: This process prepares a risk response plan for increasing the positive impact and decreasing the negative impact of risks on the project. Control risks: This process tracks identified risks, identifies new risks, executes risk response plans, and evaluates the effectiveness of executing responses throughout the lifecycle of the project. Reference: "Project Management Body of Knowledge (PMBOK Guide)"

Which of the following are used as inputs in creating the risk management plan? Each correct answer represents a complete solution. Choose all that apply.

Project management plan Organizational process assets Project charter The following are the inputs to this process: Project management plan: It includes all of the subsidiary plans and baselines for the project. Project charter: It provides various inputs, such as high-level risks, high-level project descriptions, and high-level requirements. Stakeholder register: It includes all details related to the project's stakeholders and provides an overview of their roles. Enterprise environmental factors: They include risk appetite, thresholds, and tolerances that describe the degree of risk that an organization withstand. Risk attitude consists of three elements:Risk appetite: Risk appetite is the level of uncertainty the stakeholders are willing to accept in exchange for the potential positive impacts of the risk. Risk tolerance: Risk tolerance is the degree, amount, or volume of risk that an organization or individual will withstand.Risk threshold: Risk threshold is a measure of the level of uncertainty or impact the organization is willing to operate within. Organizational process assets: They include risk categories, risk statement formats, standard templates, roles and responsibilities, authority levels for decision-making, lessons learned, and stakeholder registers. The output of this process is risk management plan.

Billy is the project manager of the HAR Project and is in month six of the project. The project is scheduled to last for 18 months. Management asks Billy how often the project team is participating in risk reassessment in this project. What should Billy tell management if he is following the best practices for risk management?

Project risk management is an agenda item at every status meeting. Risk management is an ongoing project activity. It should be an agenda item at every project status meeting. Project risk management happens at every milestone is incorrect - Milestones are good times to do reviews, but risk management should happen frequently. Project risk management is scheduled for every month in the 18-month project. is incorrect - This answer would only be correct if the project has a status meeting just once per month in the project. Project risk management has been concluded with the project planning is incorrect - Risk management happens throughout the project as does project planning. Reference: "A Guide to the Project Management Body of Knowledge, (PMBOK Guide)" 1. Domain 1: Risk Strategy and Planning 1.1. Task 1 Develop risk assessment processes and tools that quantify stakeholder risk tolerances in order to assess and determine risk thresholds for the project and set criteria for risk levels.

Risk management plan utilized within the perform qualitative risk process includes which of the following elements? Each correct answer represents a complete solution. Choose all that apply.

Revised stakeholder's risk tolerances Roles and responsibilities Budgets The risk management plan is a component of the project management plan and describes how risk management activities will be structured and performed. Here are the elements of the risk management plan utilized within the perform qualitative risk process: Roles and responsibilities Budgets Schedule activities Risk categories Definition of probability and impact Probability and impact matrix Revised stakeholder's risk tolerances Reference: PMI Risk Management Professional (PMI-RMP) Exam Preparation Courseware, Contents: "Risk management planning"

Which of the following processes is used by organizations to set the risk tolerance, identify the potential risks, and prioritize the tolerance for risk?

Risk management 1. Domain 1: Risk Strategy and Planning 1.5. Task 5 Establish evaluation criteria for risk management processes based on project baselines and objectives in order to measure effectiveness of the project risk process.

Elizabeth is a project manager for her organization and she finds risk management to be very difficult for her to manage. She asks you, a lead project manager, at what stage in the project will risk management become easier. What answer best resolves the difficulty of risk management practices and the effort required?

Risk management only becomes easier the more often it is practiced. According to the PMBOK, "Like many things in project management, the more it is done the easier the practice becomes."

Which of the following project management plans defines the risk identification, analysis, response, and monitoring strategies?

Risk management plan 1. Domain 1: Risk Strategy and Planning 1.3. Task 3 Develop and recommend project risk strategy based on project objectives in order to establish the outline for the risk management plan.

Which of the following is an input/output document that outlines exactly how risk management will be performed on a given project?

Risk management plan 1. Domain 1: Risk Strategy and Planning 1.4. Task 4 Produce risk management plan for the project on the basis of inputs such as project information, external factors, stakeholder inputs, and industry policies and procedures in order to define, fund, and staff effective risk management processes for the project that align with other project plans.

You are the project manager of the GHG project in a company. You have identified the project risks, completed qualitative and quantitative analysis, and created risk responses. You also need to document how and when risk audits will be performed in the project. Where will you define the frequency of risk audits?

Risk management plan Risk audits and their characteristics are defined in the risk management plan. The risk management plan is a document arranged by a project manager to estimate the effectiveness, predict risks, and build response plans to mitigate them. It also consists of the risk assessment matrix. Risks are built in with any project, and project managers evaluate risks repeatedly and build plans to address them. The risk management plan consists of analysis of possible risks with both high and low impacts, and the mitigation strategies to facilitate the project and avoid being derailed through which the common problems arise. Risk management plans should be timely reviewed by the project team in order to avoid having the analysis become stale and not reflective of actual potential project risks. Most critically, risk management plans include a risk strategy for project execution. Risk response plan is incorrect. The risk response plan defines the responses to the risks, not the audits. Schedule management plan is incorrect. The schedule management plan defines how the schedule will be planned, created, executed, and controlled. Quality management plan is incorrect. The quality management plan defines the quality assurance program, quality control activities, and the overall planning of quality.Reference: "Project Management Body of Knowledge (PMBOK Guide)" 1. Domain 1: Risk Strategy and Planning 1.1. Task 1 Develop risk assessment processes and tools that quantify stakeholder risk tolerances in order to assess and determine risk thresholds for the project and set criteria for risk levels.

Harry works as a project manager for BlueWell Inc. He is determining how to conduct the risk management activities for a project. According to the PMBOK, there are five inputs to the plan risk management process. Which one of the following is NOT an input to this process?

Risk management plan The following are the inputs to this process: Project management plan: It includes all of the subsidiary plans and baselines for the project. Project charter: It provides various inputs, such as high-level risks, high-level project descriptions, and high-level requirements. Stakeholder register: It includes all details related to the project's stakeholders and provides an overview of their roles. Enterprise environmental factors: They include risk appetite, thresholds, and tolerances that describe the degree of risk that an organization withstand. Risk attitude consists of three elements: Risk appetite: Risk appetite is the level of uncertainty the stakeholders are willing to accept in exchange for the potential positive impacts of the risk. Risk tolerance: Risk tolerance is the degree, amount, or volume of risk that an organization or individual will withstand.Risk threshold: Risk threshold is a measure of the level of uncertainty or impact the organization is willing to operate within. Organizational process assets: They include risk categories, risk statement formats, standard templates, roles and responsibilities, authority levels for decision-making, lessons learned, and stakeholder registers. The output of this process is risk management plan. Reference: "Project Management Body of Knowledge (PMBOK Guide)" 1. Domain 1: Risk Strategy and Planning 1.4. Task 4 Produce risk management plan for the project on the basis of inputs such as project information, external factors, stakeholder inputs, and industry policies and procedures in order to define, fund, and staff effective risk management processes for the project that align with other project plans.

Frank is the project manager of the NHH project. He is working with the project team to create a plan to document the procedures to manage risks throughout the project. This document will define how risks will be identified and quantified. It will also define how contingency plans will be implemented by the project team. What document are Frank and the NHH project team creating in this scenario?

Risk management plan The risk management plan, part of the comprehensive management plan, defines how risks will be identified, analyzed, monitored and controlled, and even responded to. A risk management plan is a document arranged by a project manager to estimate project effectiveness, predict risks, and build response plans to mitigate them. It also consists of a risk assessment matrix. Risks are built-in with any project, and project managers evaluate them repeatedly and build plans to address them. The risk management plan consists of analysis of possible risks of both high and low impact, and mitigation strategies to facilitate project and avoid its derailment. Risk management plans should be reviewed by the project team in a timely manner to avoid the analysis becoming "stale" and not reflective of actual potential project risks. Most critically, risk management plans include a risk strategy for project execution. Project management plan is incorrect. The project management plan is a comprehensive plan that communicates the intent of the project for all project management knowledge areas. Project plan is incorrect. The project plan is not an official PMBOK project management plan. Resource management plan is incorrect. The resource management plan defines the management of project resources, such as project team members, facilities, equipment, and contractors.

Which of the following processes includes tasks and roles, risk categories, schedules for risk management activities, definitions of probability and impact, and the stakeholders' tolerances?

Risk management plan 1. Domain 1: Risk Strategy and Planning 1.4. Task 4 Produce risk management plan for the project on the basis of inputs such as project information, external factors, stakeholder inputs, and industry policies and procedures in order to define, fund, and staff effective risk management processes for the project that align with other project plans.

Which of the following should propose applicable and effective security controls for managing the risks?

Risk management plan 1. Domain 1: Risk Strategy and Planning 1.4. Task 4 Produce risk management plan for the project on the basis of inputs such as project information, external factors, stakeholder inputs, and industry policies and procedures in order to define, fund, and staff effective risk management processes for the project that align with other project plans.

Where are negative risks recorded?

Risk register 4. Domain 4: Risk Monitoring and Reporting 4.7. Task 7 Capture risk lessons learned through comprehensive review of the project risk management plan, risk register, risk audits, risk process performance reports, and other associated reports in order to incorporate into future risk planning.

Which of the following documents is viewed by the senior management team to check the risks that could lead to significant costs or embarrassment to the organization?

Risk register 4. Domain 4: Risk Monitoring and Reporting 4.7. Task 7 Capture risk lessons learned through comprehensive review of the project risk management plan, risk register, risk audits, risk process performance reports, and other associated reports in order to incorporate into future risk planning.

Which of the following documents is described in the statement below? "It is developed along with all processes of risk management. It contains the results of qualitative risk analysis, quantitative risk analysis, and risk response planning."

Risk register A risk register is a document that contains results of qualitative and quantitative risk analyses and risk response planning. Description, category, cause, the probability of occurrence, impact on objectives, proposed responses, owner, and current status of all identified risks are entered in the risk register. The risk register contains the following elements: List of identified risks List of potential responses The risk register also often contains warning signs or triggers, although they aren't listed as an official part of the register. Risk register is developed along with all processes of risk management from plan risk management through monitor and control risks. Quality management plan is incorrect. A quality management plan is a component of the project management plan. It describes how the project team will implement their organization's quality policy. Risk management plan is incorrect. The risk management plan includes roles and responsibilities, risk analysis definitions, the timing for reviews, and risk threshold. The plan risk responses process takes input from the risk management plan and risk register to define the risk response. Project charter is incorrect. The project charter is the document that formally authorizes a project. The project charter provides the project manager with the authority to apply organizational resources to project activities.Reference: The Project Management Body of Knowledge, Fifth edition, Section 11.2.3.1, Page 327 4. Domain 4: Risk Monitoring and Reporting 4.7. Task 7 Capture risk lessons learned through comprehensive review of the project risk management plan, risk register, risk audits, risk process performance reports, and other associated reports in order to incorporate into future risk planning.

Which of the following statements are true regarding the risk management plan? Each correct answer represents a complete solution. Choose all that apply.

The risk management plan is an output of the plan risk management process. The risk management plan is an input to all the remaining risk-planning processes. The risk management plan includes thresholds, scoring and interpretation methods, responsible parties, and budgets. All these statements are true for the risk management plan. The risk management plan details how risk management processes will be implemented, monitored, and controlled throughout the life of the project. It includes thresholds, scoring and interpretation methods, responsible parties, and budgets. It also acts as input to all the remaining risk-planning processes. The risk management plan includes a description of the risk responses and triggers is incorrect. The risk management plan details how risk management processes will be implemented, monitored, and controlled throughout the life of the project. The risk management plan does not include responses to risks or triggers. Responses to risks are documented in the risk register as part of the plan risk responses process.