11 Practice Exam Risk Mng

When planning risk responses, the strategy of changing the project management plan to eliminate the risk is known as: A. Avoidance. B. Mitigation. C. Acceptance. D. Transference.

A. Avoidance. Eliminating the threat by eliminating the cause is risk avoidance. Mitigate: the project team acts to reduce the probability of occurrence or impact of a risk. It implies a reduction in the probability and/or impact of an adverse risk to be within acceptable threshold limits.

While preparing your risk responses, you identify additional risks. What should you do? A. Document the new risks and calculate the expected monetary value based on the probability and impact of the occureneces. B. Add reserves to the project to accommodate the new risks and notify management. C. Add a 10 percent contingency to the project budget and notify the customer. D. Determine the risk events and the associated costs, then add the cost to the project budget as a reserve.

A. Document the new risks and calculate the expected monetary value based on the probability and impact of the occureneces. When new risks are identified, they should go through the risk management process. You need to determine the probability and impact of the risks and then try to diminish them through the Plan Risk Responses process. Only after these efforts should you consider adding reserves for time and/or cost. Any reserves should be based on a detailed analysis of risk. Calculating the expected monetary value of the risks is an important part of the risk management process, and the best choice presented here.

You are performing an audit of one of your project manager's projects and notice that she did not consider the network diagram as part of the Identify Risks process. As a result, the project manager will probably do which of the following? A. Forget some path convergences issues in her risk evaluation. B. Forget some stakeholders in her risk evaluation. C. Forget some activities in her risk evaluation. D. Forget activity precedence in her risk evaluation.

A. Forget some path convergences issues in her risk evaluation. The network diagram shows where activities converge from many activities to one activity or diverge from one activity to many activities. These are bottlenecks that increase the risk of the central activity.

Which of the following is the MOST likely cause of poor risk management? A. Lack of a prioritized list of risks B. Poor risk monitoring and control C. Lack of detail in the project scope statement D. Inadequate risk response planning

A. Lack of a prioritized list of risks Risk management cannot proceed effectively wihtout a priortized list of risk.

You are finishing the prototype that was planned as a risk mitigation stratgy when you find out the benefit cost ratio (BCR) has improved and the project cost perfromance index (CPI) is 1.03. The standard deviation of the project time estimate has decreased and you discover the prototype, already almost finished, can fulfill the needs to another project requirement as well. What should you do FIRST? A. Look for the risk impacts of fulfilling another requirement with the prototype. B. Compress the project to get it completed faster using the prototype. C. Look for ways to help get the prototype accepted faster and thus cut cost. D. Review the benefits of the project with the customer and determine if the prototype will improve the benefits.

A. Look for the risk impacts of fulfilling another requirement with the prototype. All choices are generally correct. Which is best, or, more importantly, which deals with the situation described here? The only real issue is prototyping being able to fulfill more requirements. The CPI, cost benefit ratio, and standard deviation do not represent problems, so it is unnecessary to complete or get the prototype approved faster than planned, or to improve the benefits of the project. When something like this happens, many people neglect to look at risk impacts. It is best to look at the risk impact of this change.

All of the following are ALWAYS inputs to the risk management process EXCEPT: A. Project status reports. B. Work breakdown structure. C. Lessons learned. D. Historical information.

A. Project status reports. Project status reports can be an input to risk management. However, when completing risk management for the first time, you would not have project status reports. Therefore, project status reports are not always an input to risk managment.

Outputs of the Plan Risk Responses process include: A. Residual risks, fallback plans, and contingency reserves. B. Contingency plans, project management plan updates, and a sensitivity analysis. C. Secondary risks, process updates, and risk owners. D. Risk triggers,contracts, and a risk list.

A. Residual risks, fallback plans, and contingency reserves. A risk list, process updates, and sensitivity analysis are not outputs of the Plan Risk Responses process. Residual risks, fallback plans, and contingency reserves are all outputs of the Plan Risk Responses process, making this the correct answer.

The outputs of the Plan Risk Responses process include risk response plans, risk owners assigned, and: A. Residual rsiks. B. Probability of achieving cost objectives. C. Closed risks. D. Probability and impact matrix.

A. Residual risks. Closed Risks are an output of Control Risks. A probability and impact matrix is adopted during the Plan Risk Management process. The probability of achieving objectives is calculated during Perfrom Quantitative Risk Analysis. Risk response plans, risk owners assigned, and residual risks are outputs of the Plan Risk Responses process. Residual Risk. A risk that remains after risk responses have been implemented.

A project manager has been instructed to use the project charter to help identify risks on the project. This does not make sense to him. If you were asked to explain the reason the project charter is used in this way, what is the BEST explanation? A. Reviewing what is said and not said in the project charter will help determine risks. B. The project charter is issued by the sponsor. C. Reviewing the project charter will help determine a description of the product of the project. D. The project charter describes the business needs of the project.

A. Reviewing what is said and not said in the project charter will help determine risks. Reviewing what is said and not said in the project charter will help determine risks. Notice that some of the other choices are correct statements but do not answer the question.

A project has a schedule reserve of 28 days when the customer adds scope not previously planned for. The change has a 40 percent chance of delaying the project by 14 days. What should be done? A. Add more resources to the project. B. Add 5.6 days to the schedule reserve. C. Plan to add 14 days of overtime to the project D. Look for ways to cut 14 days of work from another activity

B. Add 5.6 days to the schedule reserve. Overtime is never one of the first options in porject management because there are many other ways to handle such problems. Many people select cutting 14 days from the schedule, but reread the question. You would not look for ways to cut 14 days. The expected monetary value of the new risk event is only 5.6 days (40 persent x 14 days = 5.6). A reserve is designed to cover specific risk events previously identified and measured in the risk management process. The only viable choice is to add 5.6 days to the schedule reserve.

The probabilistic analysis of the project is an input to which part of the risk management process? A. Perform Quantitative Risk Analysis B. Plan Risk Responses C. Identify Risks D. Perform Qualitative Risk Analysis

B. Plan Risk Responses A prioritized list of quantified risks from Quantitative Risk Analysis is an input to the Plan Risk Responses process.

What is the difference between management reserves and contingency reserves? A. Contingency reserves address known knowns, wheareas management reserves address known unknowns. B. Contingency reserves address known unknowns, whereas management reserves address unknown unknowns. C. Contingency reserves are managed by senior management, whereas management reserves are managed by the project manager. D. Contingency and management reserves both address known unknowns and could be considered the same.

B. Contingency reserves address known unknowns, whereas management reserves address unknown unknowns. Management reserves address unknown unknowns and are managed by senior management. Contingency reserves address known unknows and are managed by the project manager.

Executing risk response plans in order to react to risk events throughout the project is called: A. Mitigation. B. Control. C. Contingency planning. D. Life cycel costing.

B. Control. The Control Risks process involves executing risk response plans in order to respond to risk events over the course of the project.

Risk owners can potentially have conflict with risk auditors because risk auditors: A. Report to the project manager. B. Investigate the effevtiveness of the risk owner. C. Measure the effectiveness of the risk thresholds. D. Report to the stakeholders.

B. Investigate the effectiveness of the risk owner. Risk auditors do not measure the effectiveness of risk thresholds. The only source of potential conflicht listed here is that one of the functions of risk auditors is to investigate the effectiveness of risk ownders. (p.438)

Determining cost and schedule reserves, identifying risks requiring the most attention, and determining the overall project risk exposure are all part of the process of Perform Qualitative Risk Analysis, Perform Qunatitative Risk Analysis, and: A. Identify Risks. B. Plan Risk Responses. C. Control Risks. D. Plan Risk Management.

B. Plan Risk Responses. You need to knoe the risk management process! Perform Qualitative Risk Analysis is the process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact. The key benefit of this process is that it enables project managers to reduce the level of uncertainty and to focus on high-priority risks. Perform Quantitative Risk Analysis is the process of numerically analyzing the effect of identified risks on overall project objectives. The key benefit of this process is that it produces quantitative risk information to support decision making in order to reduce project uncertainty.

A project manager analyzed the quality of risk data and asked various stakeholders to determine the probability and impact of a number of risks. He is about to move to the next process of risk management. Based on this information, what has the project manager forgotton to do? A. Create a fallback plan. B. Provide a standardized risk rating matrix. C. Evaluate trends in risk analysis. D. Identify triggers.

B. Provide a standardized risk rating matrix. The project manager is in the Perform Qualitative Risk Analysis process. Activities of this process include risk adta quality assessment and probability and impact matrix development. It apperas the project manager has not yet completed the matrix, which is used to sort risks based on their probability and impact ratings. Trend analysis, the identification of triggers, and development of fallback plans will occur later in risk management.

Allocating ownership of a risk to a third party who is best able to capture the opportunity is an example of _____ the risk. A. Exploiting B. Sharing C. Accepting D. Enhancing

B. Sharing Sharing the opportunity allocates ownership of the opportunity to a third party that is best able to make it happen (p.429).

A project manager whom you have been mentorinig has completed the Plan Risk Responses process. What is the NEXT thing the project manager should do? A. Updae the risk identification checklist. B. Update the project management plan. C. Create risk response strategies. D. Recommend corrective action.

B. Update the project management plan. Risk response strategies have already been created. Recommending corrective action and updating the risk identification checklist occur during Control Risks. Project management plan updates are an output of Plan Risk Responses.

The proejct manager and the team have developed response plans for the identified risks. A senior manager has asked for the amount of risk reserves needed for the project. What is the FIRST thing the project maanger should do? A. Prioritize the list of risks. B. Create the overall risk rating for the project. C. Analyse secondary risks. D. Create the risk reserves.

C. Analyse secondary risks. The only other factor to help determine risk reserves that would come after risk response strategies is the analysis of secondary risks. Secondary Risk. A risk that arises as a direct result of implementing a risk response.

Most of the project risks will be identified during which risk management process? A. Identify Risks and Perform Qualitative Risk Analysis B. Perform Qualitative Risk Analysis and Control Risks C. Identify Risks and Control Risks D. Perform Quantitative Risk Analysis and Identify Risks

C. Identify Risks and Control Risks This is a tricky question. Although risks can be identified at any time throughout the project, most risks are identified during the Identify Risks process. Newly emerging risks are identified in the Control Risks process.

A list of risks for additinal study is an output of: A. Identify Risks. B. Plan Risk Management. C. Perform Qualitative Risk Analysis. D. Perform Quantitative Risk Analysis.

C. Perform Qualitative Risk Analysis. Some risks from Perform Qualitative Risk Analysis will be candiates for furhter study in Perform Quantitative Risk Analysis.

Two people are in the process of estimating probabilities for each of their identified risks. Which step of risk management is this? A. Plan Risk Responses B. Identify Risks C. Perfrom Qualitative Risk Analysis D. Control Risks

C. Perfrom Qualitative Risk Analysis In Identify Risks, we make a list of risks. In Perform Qualitative Risk Analysis, we asses the impact and probability of the event. In Plan Risk Responses, we plan our responses to the risk events. In Control Risks, we monitor the effectiveness of the responses. The team members are performing Qualitative Risk Analysis.

The probabilistic analysis of the project is an input to which part of the risk management process? A. Identify Risks B. Perfrom Quantitative Risk Analysis C. Plan Risk Responses D. Perfrom Qualitiative Risk Analysis

C. Plan Risk Responses A prioritized list of quantified risks from Quantitative Risk Analysis is an inpunt to the Plan Risk Responses process.

Outputs of the Plan Risk Responses process include: A. Secondary risks, process updates, and risk owners. B. Risk triggers, contracts, and a risk list. C. Residual risks, fallback plans, and contingency reserves. D. Contingency plans, project management plan updates, and a sensitivity analysis.

C. Residual risks, fallback plans, and contingency reserves. A risk list, process updates, and sensitivity analysis are not outputs of the Plan Risk Responses process. Residual risks, fallback plans, and contingency reserves are all outputs of the Plan Risk Responses process, making this correct answer.

Workarounds are determined during which risk management process? A. Identify Risks B. Perform Quantitative Risk Analysis C. Plan Risk Responses D. Control Risks

D. Control Risks A workaround refers to determing how to handle a risk that has occured but was not included in the risk register. The project must be in the Control Risks

Purchasing insurance is BEST considered an example of risk: A. Avoidance. B. Acceptance. C. Mitigation. D. Transfer.

D. Transfer. To mitigate risk, we either reduce the probability of the event happening or reduce its impact. Acceptance of risk means doing noting (if it happens, it happens, or contingency plans are created). Avoidance of risk means we change the way we will execute the project so the risk is no longer a factor Transference is passing the risk off to another party. Many people think of using insurance as a way of decreasing impact. However, purchasing insurance transfers the risk to another party.