Ch 11 - Project Risk Management

____________________ - hierarchy of potential risk categories for a project

risk breakdown structure

You are considered to be what when more money is at stake, you have a lower tolerance for risk.

risk-averse

_____ involves monitoring identified and residual risks, identifying new risks, carrying out risk response plans, and evaluating the effectiveness of risk strategies throughout the life of the project. A. Controlling risk B. Planning risk responses C. Performing quantitative risk analysis D. Performing qualitative risk analysis

A. Controlling risk

_____ involves eliminating a specific threat, usually by eliminating its causes. A. Risk avoidance B. Risk transference C. Risk acceptance D. Risk mitigation

A. Risk avoidance

_____ involves doing whatever you can to make sure the positive risk happens. A. Risk exploitation B. Risk acceptance C. Risk sharing D. Risk enhancement

A. Risk exploitation

Those who are _____ have a higher tolerance for risk, and their satisfaction increases when more payoff is at stake. A. risk-indifferent B. risk-seeking C. risk-averse D. risk-neutral

B. risk-seeking

_____ are predefined actions that the project team will take if an identified risk event occurs. A. Workarounds B. Management reserves C. Contingency plans D. Secondary risks

C. Contingency plans

_____ involves prioritizing risks based on their probability and impact of occurrence. A. Identifying risks B. Performing quantitative risk analysis C. Performing qualitative risk analysis D. Planning risk responses

C. Performing qualitative risk analysis

_____ involves numerically estimating the effects of risks on project objectives. A. Identifying risks B. Planning risk responses C. Performing quantitative risk analysis D. Performing qualitative risk analysis

C. Performing quantitative risk analysis

_____ involves taking steps to enhance opportunities and reduce threats to meeting project objectives. A. Performing quantitative risk analysis B. Controlling risk C. Planning risk responses D. Performing qualitative risk analysis

C. Planning risk responses

_____ involves shifting the consequence of a risk and responsibility for its management to a third party. A. Risk avoidance B. Risk mitigation C. Risk transference D. Risk acceptance

C. Risk transference

Identifying risks is a subprocess of the _____ process of project risk management. A. monitoring and controlling B. closing C. planning D. executing

C. planning

_____ is a fact-finding technique that can be used for collecting information in face-to-face, phone, e-mail, or instant-messaging discussions. A. Brainstorming B. The Delphi technique C. Monte Carlo analysis D. Interviewing

D. Interviewing

_____ involves reducing the impact of a risk event by reducing the probability of its occurrence. A. Risk acceptance B. Risk transference C. Risk avoidance D. Risk mitigation

D. Risk mitigation

_____ are unplanned responses to risk events used when project teams do not have contingency plans in place. A. Fallback plans B. Contingency plans C. Triggers D. Workarounds

D. Workarounds

_____________ - derive a consensus among a panel of experts who make predictions about future developments; uses repeated round of questioning and written responses to take advantage of group input while avoiding the possible biasing effects of oral panel deliberations

Delphi technique

True or false? Brainstorming is a systematic, interactive forecasting procedure based on independent and anonymous input regarding future events.

False

True or false? Risk events refer to specific, certain events that may occur to the detriment or enhancement of the project.

False

Simulation is usually based on some form of what analysis?

Monte Carlo

What can predict the probability of finishing by a certain date or that cost will be equal to or less than a certain value?

Monte Carlo analysis

_____________________ - identifies risks; maintains awareness of risks throughout life of project by helping to monitor risks

Top 10 Risk Item Tracking

True or false? A probability/impact matrix or chart lists the relative probability of a risk occurring on one side of a matrix or axis on a chart and the relative impact of the risk occurring on the other.

True

True or false? A risk-seeking person prefers outcomes that are more uncertain and is often willing to pay a penalty to take risks.

True

True or false? Contingency plans are predefined actions that the project team will take if an identified risk event occurs.

True

List at least 2 benefits of risk management.

anticipate/avoid problems, prevent surprises, improve ability to negotiate, meet customer commitments, reduce schedule slips, reduce cost overruns

Name 4 basic response strategies for negative risks.

avoidance, acceptance, transference, mitigation

_____________ - a group attempts to generate ideas or find a solution for a specific problem by amassing ideas spontaneously and without judgement

brainstorming

What are 4 common techniques for identifying risks?

brainstorming, Delphi, interviewing, root cause analysis

_______________ - predefined actions that the project team will take if an identified risk event occurs

contingency plans

In addition to a risk management plan, many projects also include _______________, ________________, and _______________.

contingency plans, fallback plans, contingency reserves

_________________ - provisions held by project sponsor or organization to reduce risk of cost or schedule overruns to an acceptable level

contingency reserves

________________- for known risks _______________ - funds help for unknown risks

contingency reserves, management reserves

Which risk management process are the following outputs from? Work performance info, change requests, updates to project management plan, other project documents, organizational process assets

controlling risk

Which risk management process is the following? Monitoring identified and residual risks, identifying new risks, carrying out risk response plans, and evaluating effectiveness of risk strategies throughout project lifetime

controlling risk

_______________ - diagramming analysis technique used to help select the best course of action when future outcomes are uncertain; involves calculating expected monetary value

decision tree

_______________ - product of a risk event probability and the risk event's monetary value

expected monetary value (EMV)

Probabilities are normally determined based on ____________________.

expert judgement

Name 4 basic response strategies for positive risks.

exploitation, sharing, enhancement, acceptance

Which risk management process is the following output from? Start of risk register

identifying risks

Which risk management process is the following? Determining which risks are likely to affect project and documenting the characteristics of each

identifying risks

_____________ - collecting info in face-to-face, phone, e-mail, or instant-messaging discussions

interviewing

Can identify risk based on _____________ and ________________.

nature of project/products are created, project management knowledge areas (scope, time, cost, quality)

Managing ___________ risks involves number of possible actions that managers can take to avoid, lessen, change, or accept the potential effects of risks on project.

negative

Which risk management process is the following? Prioritizing risks based on their probability and impact of occurrence

performing qualitative risk analysis

Which 2 risk management processes is the following output from? Project documents updates

performing qualitative risk analysis/performing quantitative risk analysis

Which risk management process is the following? Numerically estimating the effects of risks on project objectives

performing quantitative risk analysis

Which risk management process is the following output from? Risk management plan

planning risk management

Which risk management process is the following? Deciding how to approach and plan risk management activities for project.

planning risk management

What are the 6 processes with risk management?

planning risk management, identifying risks, performing qualitative risk analysis, performing quantitative risk analysis, planning risk responses, controlling risk

Which risk management process are the following outputs from? Project management plan updates and project documents updates

planning risk responses

Which risk management process is the following? Taking steps to enhance opportunities and reduce threats to meeting project objectives

planning risk responses

___________ risk management is like investing in opportunities

positive

What is the following a goal of? Minimizing potential negative risks while maximizing potential positive risks

project risk management

_______________________ - art and science of identifying, analyzing, and responding to risk throughout the life of a project and in the best interests of meeting project objectives.

project risk management

____________ risks - risks that remain after all response strategies have been implemented

residual

________ - uncertainty that can have a negative or positive effect on meeting project objectives

risk

_________________ - degree of uncertainty an entity is willing to take on, in anticipation of a reward

risk appetite

Attitudes towards risk are based on what two themes?

risk appetite, risk tolerance

_____________ - document that contains results of various risk management processes; tool for documenting potential risk events and related info

risk register

_________________ - maximum acceptable deviation an entity is willing to accept on project objectives as potential impact

risk tolerance

_________________ - amount of satisfaction/pleasure received from potential payoff

risk utility

You are considered to be what when you have a balance between risk and payoff.

risk-neutral

You are considered to be what when you have a higher tolerance for risk, and a satisfaction increases when more payoff is at stake.

risk-seeking

_____________ - often results in identifying even more potential risks for a project and threats

root cause analysis

____________ risks - direct result of implementing a risk response

secondary

What uses a representation or model of a system to analyze its expected behavior/performance?

simulation

_____________ - indicators or symptoms of actual risk events

triggers

_______________ - list of risks that have low priority but are still identified as potential risks

watch list

_____________________ - documents the procedures for managing risk throughout the project; summarizes how risk management will be performed on a particular project

risk management plan

A _____ person achieves a balance between risk and payoff. A. risk-averse B. risk-seeking C. risk-fearing D. risk-neutral

D. risk-neutral

True or false? The last step in project risk management is deciding how to address this knowledge area for a particular project by performing risk management planning.

False

True or false? Quantitative risk analysis need not be done for projects that are large and complex.

True

True or false? Risks can have both negative and positive effects on meeting project objectives.

True

_______________ - developed for risks that have a high impact on meeting project objectives, and are put into effect if attempts to reduce the risk don't work

fallback plans

True or false? The risk register can be created with a simple Microsoft Word or Excel file.

True

What 3 preferences are part of the utility theory of risk?

risk-averse, risk-seeking, risk-neutral

The _____ lists the relative probability of a risk occurring and the relative impact of the risk occurring. A. Top Ten Risk Item Tracking chart B. requirements traceability matrix C. probability/impact matrix D. expectations management matrix

C. probability/impact matrix

People often describe risk probability/consequence as being _____________, _____________, or _____________.

high, medium, low

Some teams develop a single number for a risk score simply by multiplying a score for _______________ by a numeric score for ___________________.

probability, impact

_____________ - lists the relative probability of a risk occurring and relative impact of risk occurring

probability/impact matrix

_____________ - numbers that represent overall risk of specific events, based on their probability of occurring and consequences to project if they do occur

risk factors

_____________ - specific, uncertain events that may occur to the detriment or enhancement of the project

risk events