RISK MIDTERM

You are the project manager for XYZ company. The Quality Control team recently identified a large number of defects in the project deliverables which the team had to repair. You have been working for a few weeks with the Quality Assurance team to adjust some quality procedures and address some training issues for your project which the team believes is the reason for the defects. The project is now behind schedule due to the problems encountered. The CPI is currently 1.12 and the SPI 0.82. While discussing the quality issues in a status meeting, a key stakeholder comments that she is alarmed at the potential cost impact of one particular risk and is wondering why it is of little concern to the project team. You are confident that her concern for that particular cost risk is unwarranted at the moment; in fact, you believe there is another risk that is of bigger concern. The following table displays the current risks for your project. Considering that schedule is a concern right now, which risk are you going to tell the stake holder and other meeting participants is the greatest and is therefore the biggest concern of the team right now? RiskProbabilityCost ImpactSchedule ImpactA0.428B0.463C0.323D0.249 a) A b) A & B c) D d) B

a) A

In the Identify Risks phase, you are working with your team to determine which risks may affect project performance. Which of the following information gathering techniques can you use to facilitate the process? a) Brainstorming, Delphi technique, and root cause analysis b) Delphi technique, SWOT analysis, and risk audits c) SWOT analysis, Decision tree, and influence diagrams d) Brainstorming, cause and effect diagrams, and P&I Matrix

a) Brainstorming, Delphi technique, and root cause analysis

In managing risks for your project, you examine the extent to which the uncertainty of each project element affects the objective being examined when all other uncertain elements are held at baseline values. This helps to: a) Determine which risks may have impact on the project. b) Translate the uncertainties at a detailed level into potential impact on objectives expressed at the level of the total project. c) Determine the implication of choosing one alternative over the other. d) Get a qualitative analysis of the risk.

a) Determine which risks may have impact on the project

While managing a project, you decide to create a prototype of your product first to ensure that it is acceptable to stakeholders before creating your product. This is an example of: a) Risk mitigation b) Simulation c) Risk avoidance d) Project assumptions testing

a) risk mitigation

You work for a company which executes heavy engineering contracts. While performing risk response planning for your project, you determine a risk that there is a "Possibility of getting new orders in the future which are beyond the current capacity of our production facilities." What should you do? a) Classify this as a weakness and transfer it to another company b) Classify this as an opportunity and exploit the opportunity. c) Classify this as strength and create a fall-back plan. d) Classify this as a threat and create workaround plans.b) Cl

b) Classify this as an opportunity and exploit the opportunity

In your project, you have just conducted a risk data quality assessment to evaluate the degree to which the data about risks is useful for risk management. What is your next step? a) Perform a structured review of the project plans and assumptions, both at the total project and detailed scope levels. b) Conduct interviews to qualify the probability and impact of risks on project activities. c) Develop checklists to identify risks based on historical information and knowledge that has been accumulated from previous similar projects. d) Conduct planning meetings to develop the risk management plan.

b) Conduct interviews to qualify the probability and impact of risks on project activities

Even after carefully performing risk management for the project, you realize that possibility of new risks occurring in the future still exists. You will be able to handle such risks if you perform: a) Plan Risk Responses b) Control Risks c) Identify Risks d) Plan Risk Management

b) Control risks

In your project, you are creating a diagram that describes the decision consideration and implications of choosing one or another of the available alternatives. This will help to: a) Get a qualitative analysis of the risk b) Determine which decision yields the greatest expected value c) Determine which risks may have the most impact on the project d) Translate the uncertainties at a detailed level into potential impact on objectives expressed at the level of total project

b) Determine which decision yields the greatest expected value

Your project is now in the executing stage. You are continuously monitoring and controlling risks to minimize negative risks and to take timely action. Risk audits are helpful in this context because they: a) Provide trends in the execution of the project, which can be reviewed using performance data. b) Examine and document the effectiveness of risk responses. c) Help in reassessment of risks. d) Provide inputs required for the project planning stage.

b) Examine and document the effectiveness of risk responses

You have completed the process of developing options and actions to enhance opportunities and to reduce threats to project objectives. What is your NEXT step? a) Assess the priority of identified risks using their probability of occurrence b) Implement risk response plans, track identified risks, monitor residual risks, identify new risks, and evaluate risk process effectiveness throughout the project c) Determine which risks may affect the project and document their characteristics d) Define how to conduct risk management activities for a project.

b) Implement risk response plans, track identified risks, monitor residual risks, identify new risks, and evaluate risk process effectiveness throughout the project

Graphical representations of situations showing causal influences, time ordering of events and other relationships among variables and outcomes are also referred to as: a) Simulation diagrams b) Influence diagrams c) System flow charts d) Cause-and-effect diagrams

b) Influence diagrams

In Plan Risk Responses process, you are developing options and actions to reduce threats to your project's objectives. When you show the results to your project sponsor, she is not comfortable with the risks in the project and suggests that the project should be decreased. This is an example of: a) Risk acceptance b) Risk avoidance c) Risk mitigation d) Risk transfer

b) Risk avoidance

You are in the process of creating a risk management plan for your project. This plan will describe how risk management will be structured and performed on the project. Your risk management plan may include: a) Risk audits, triggers, and inputs to other processes b) Budgeting, timing, and risk categories c) Risk audits, reserve analysis, and technical performance measurement d) Avoid, transfer, mitigate, and accept risks

b) budgeting, timing, and risk categories

You are the Project manager in an automobile manufacturing Company. Machine parts required in your manufacturing process supplied by a vendor did not reach in time because of heavy rains. You had anticipated this risk and planned for it in your risk response plan. So, as per your risk response plan, you started using unutilized machine parts supplied one year ago. However, this has subjected your project to a new risk - the machine parts which were not used for one year suffer from higher level of defects. This new risk can also be called: a) Residual risks b) Secondary risks c) Unmanageable risks d) Inidentifiable risks

b) secondary risks

Which of the following tools and techniques would you NOT use in your project during the Plan Risk Response processes? a) Contingent response strategies b) Simulation c) Strategies for negative risks or threats d) Expert judgment

b) simulation

While doing a cost-benefit analysis, you determine that a new project has 60% probability of earning a profit of $1,000,000 or 30% probability of incurring a loss of $500,000. What is the expected monetary value of the decision? a) $400,000 b) $200,000 c) $450,000 d) $600,000

c) $450,000

You are in the Identity Risks process of your project where you determine which risks may affect the project and document their characteristics. Who would you want to be a part of the identity Risks process? a) The risk management team, end users, and risk management expert b) The project manager, project team members, subject matter experts, and customers c) All relevant stakeholders d) Positively impacted stakeholders

c) All relevant stakeholders

You have geographically dispersed team, from whom you would like to anonymously obtain expert opinion on the project you are managing. Which information gathering technique should you use? a) Checklists b) Brainstorming c) Delphi technique d) SWOT analysis

c) Delphi technique

In your project, you identified disaster situations (e.g. floods, earthquakes, etc.) as potential risks. The project sponsor suggested that, at the project level, no steps could be taken to deal with such risks and recommended creation of a contingency reserve (with 5% of the project budget) which could be used in case of disaster situations. This is an example of: a) Risk mitigation b) Bad policy decision c) Risk acceptance d) Risk avoidance

c) risk acceptance

Utility function is a commonly used technique to determine risk tolerance levels. Some project managers are more averse to risk than others. Which of the following is NOT a commonly used classification for risk tolerance? a) Neutral risk taker b) Risk averter c) Risk mitigator d) Risk seeker

c) risk mitigator

In your project, you have completed the Identify Risks process to determine which risks may affect the project, and a risk register has been prepared. What should you do NEXT? a) Exploit, share or enhance opportunities b) Risk audits c) Risk probability and impact assessment d) Avoid, transfer or mitigate negative risks

c) risk probability and impact assessment

In your project, you have created a list of identified risks and potential responses. You should document this information in the: a) Risk database b) Project plan c) Risk register d) Risk management plan

c) risk register

Your company is a pioneer in the construction industry. The government recently floated a tender for setting up a new airport. Since you do not have all the requisite skills within the company, you enter into a joint venture with a leading airport construction company to bid jointly for the government contract. This is an example of: a) Risk mitigation b) Risk exploitation c) Risk sharing d) Risk enhancing

c) risk sharing

As a project manager you estimate that, in your project, there is: 50% probability of earning $40,000 profit 50% probability of incurring $25,000 loss What is the expected value for the project considering profit and loss possibilities? a) -$7,500 b) $32,500 c) $25,000 d) $7,500

d) $7,500

Workarounds differ from contingency plans in that: a) Workarounds only include plans for force majeure events, e.g. natural calamities. b) Contingency plans include plans for force majeure events, e.g. natural calamities, but workarounds are the residual risks in the project. c) Workarounds are planned in advance and contingency plans are not planned in advance. d) Contingency plans are planned in advance and workarounds are not planned in advance.

d) Contingency plans are planned in advance and workarounds are not planned in advance

As a project manager, you are concerned with determining which risks may affect the project. What is the process by which such risks are determined? a) Plan Risk Management b) Plan Risk Responses c) Perform Qualitative Risk Analysis d) Identify Risks

d) Identify Risks

In your project, you have identified important risks and planned appropriate responses to the risks. Some risks, such as the possibility of natural disasters impacting the project, have been documented and accepted in the risk register. What are the remaining risks called? a) Unidentifiable Risks b) Accepted Risks c) Secondary Risks d) Residual Risks

d) Residual risks

You are the project manager of a project which involves off-shore oil exploration. Since you cannot plan for all eventualities, you establish a contingency reserve, including amounts of time, money, or resources to handle the risks. This is an example of: a) Risk transfer b) Risk avoidance c) Improper risk planning since all risks should be identified and accounted d) Active risk acceptance

d) active risk acceptance

The Plan Risk Responses process helps the project manager to develop options and actions to enhance opportunities and to reduce threats to project objectives. The output from the Plan Risk Responses is updates to the risk register, which should be: a) Used for periodic risk reviews to identify risks ratings and prioritization b) At the level of detail of work packages in the WBS c) Able to identify and document residual risks and secondary risks d) At the level of detail whereby actions can be taken

d) at the level of detail whereby actions can be taken

In your project, you are about to complete the Plan Risk Responses process. Completion of certain tasks marks the end of the process. Which one of the following is NOT that task? a) People have been identified to take responsibility for each agreed-to and funded risk response. b) High priority risks are addressed in detail in the risk register. c) Negative risks have been considered for avoidance, transference or mitigation. d) Low priority risks are included in the risk mitigation plan if they occur.

d) low priority risks are included in the risk mitigation plan if they occur