PM Chapter 11

37. A(n) _____ is a diagramming analysis technique used to help select the best course of action in situations in which future outcomes are uncertain. a. decision tree b. activity-on-arrow c. workaround d. backward pass

a. decision tree

28. _____ 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. Performing quantitative risk analysis b. Planning risk responses c. Controlling risk d. Performing qualitative risk analysis

c. Controlling risk

42. _____ involves reducing the impact of a risk event by reducing the probability of its occurrence. a. Risk avoidance b. Risk acceptance c. Risk transference d. Risk mitigation

d. Risk mitigation

48. _____ risks refer to those that are direct results of implementing risk responses. a. Architectural b. Primary c. Residual d. Secondary

d. Secondary

51. A project _____ is an uncertainty that can have a negative or positive effect on meeting project objectives.

risk

45. _____ involves allocating ownership of the risk to another party. a. Risk exploitation b. Risk sharing c. Risk enhancement d. Risk acceptance

b. Risk sharing

58. _____ is the process of understanding what potential events might hurt or enhance a particular project.

contingency reserves

18. The risk register can be created with a simple Microsoft Word or Excel file.

true

68. _____ is the product of a risk event probability and the risk event's monetary value.

EMV

35. Identifying risks is a subprocess of the _____ process of project risk management. a. planning b. executing c. monitoring and controlling d. closing

a. planning

32. A(n) _____ represents decision problems by displaying essential elements, including decisions, uncertainties, causality, and objectives, and how they influence each other. a. risk breakdown structure b. influence diagram c. process flow chart d. work breakdown structure

b. influence diagram

19. Risk utility rises at a decreasing rate for a _____ person. a. risk-seeking b. risk-averse c. risk-neutral d. risk-indifferent

b. risk-averse

59. _____ is a technique by which a group attempts to generate ideas or find a solution for a specific problem by amassing ideas spontaneously and without judgment.

brainstorming

39. What is the first step in a Monte Carlo analysis? a. Determine the probability distribution of each variable. b. For each variable, such as the time estimate for a task, select a random value based on the probability distribution for the occurrence of the variable. c. Assess the range for the variables being considered. d. Run a deterministic analysis or one pass through the model using the combination of values selected for each one of the variables.

c. Assess the range for the variables being considered.

30. Unenforceable conditions or contract clauses and adversarial relations are risk conditions associated with the project _____ management knowledge area. a. integration b. quality c. procurement d. human resources

c. procurement

69. _____ are provisions held by the project sponsor or organization to reduce the risk of cost or schedule overruns to an acceptable level.

contingency reserves

60. The basic concept of the _____ technique is to derive a consensus among a panel of experts who make predictions about future developments.

delphi

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

false

12. Top Ten Risk Item Tracking is a quantitative risk analysis tool.

false

15. The lower the earned monetary value calculation for a project, the chances of project success is higher.

false

4. Unknown risks can be managed proactively.

false

54. The term _____ is used to describe risks that the project team has identified and analyzed.

known risks

72. Risk _____ refers to reducing the impact of a risk event by reducing the probability of its occurrence.

mitigation

50. Potential problems that might occur on the project and how they might impede project success are _____ risks.

negative

73. _____ risks are risks that remain after all of the response strategies have been implemented.

residual

71. _____ involves accepting the consequences should a risk occur.

risk acceptance

57. A(n) _____ is a hierarchy of potential risk categories for a project.

risk breakdown structure

65. _____ are numbers that represent the overall risk of specific events, based on their probability of occurring and the consequences to the project if they do occur.

risk factors

56. A(n) _____ documents the procedures for managing risk throughout the project.

risk management plan

64. The _____ is the person who will own or take responsibility for the risk.

risk owner

62. A(n) _____ is a document that contains results of various risk management processes.

risk register

66. The main output of qualitative risk analysis is updating the ________.

risk register

52. _____ is the amount of satisfaction or pleasure received from a potential payoff.

risk utility

53. Risk utility rises at a decreasing rate for a(n) _____ person.

risk-averse

70. _____ helps professionals to see the effects of changing one or more variables on an outcome.

sensitivity analysis

9. The Delphi technique is a systematic, interactive forecasting procedure based on independent and anonymous input regarding future events.

true

24. _____ involves determining which risks are likely to affect a project and documenting the characteristics of each. a. Identifying risks b. Planning risk management c. Performing qualitative risk analysis d. Performing quantitative risk analysis

a. Identifying risks

27. _____ involves taking steps to enhance opportunities and reduce threats to meeting project objectives. a. Performing quantitative risk analysis b. Planning risk responses c. Controlling risk d. Performing qualitative risk analysis

b. Planning risk responses

47. _____ applies to positive risks when the project team cannot or chooses not to take any actions toward a risk. a. Risk enhancement b. Risk acceptance c. Risk sharing d. Risk exploitation

b. Risk acceptance

46. _____ involves changing the size of the opportunity by identifying and maximizing key drivers of the positive risk. a. Risk exploitation b. Risk sharing c. Risk enhancement d. Risk acceptance

c. Risk enhancement

44. _____ involves shifting the consequence of a risk and responsibility for its management to a third party. a. Risk avoidance b. Risk acceptance c. Risk transference d. Risk mitigation

c. Risk transference

33. 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

31. _____ 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. Monte Carlo analysis c. The Delphi technique d. Interviewing

d. Interviewing

26. _____ involves numerically estimating the effects of risks on project objectives. a. Performing qualitative risk analysis b. Planning risk responses c. Identifying risks d. Performing quantitative risk analysis

d. Performing quantitative risk analysis

21. A _____ person achieves a balance between risk and payoff. a. risk-seeking b. risk-averse c. risk-fearing d. risk-neutral

d. risk-neutral

5. 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

63. _____ are indicators or symptoms of actual risk events.

triggers

1. Risks can have both negative and positive effects on meeting project objectives.

true

11. 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

13. The Microsoft Solution Framework (MSF) includes a risk management model that includes developing and monitoring a top-ten master list of risks.

true

14. Quantitative risk analysis need not be done for projects that are large and complex.

true

16. The Monte Carlo analysis can predict the probability of finishing by a certain date or the probability that the cost will be equal to or less than a certain value.

true

17. Identified risks may not materialize, or their probabilities of occurrence or loss may diminish.

true

2. One possible response to managing negative risk it to accept the potential effects from the risk.

true

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

true

6. Contingency plans are predefined actions that the project team will take if an identified risk event occurs.

true

67. A(n) _____ is a list of risks that are low priority, but are still identified as potential risks.

watch list

74. Project teams sometimes use _____, which are unplanned responses to risk events, when they do not have contingency plans in place.

workarounds

29. _____ are predefined actions that the project team will take if an identified risk event occurs. a. Secondary risks b. Workarounds c. Contingency plans d. Management reserves

c. Contingency plans

7. Brainstorming is a systematic, interactive forecasting procedure based on independent and anonymous input regarding future events.

false

61. System or process _____ are diagrams that show how different parts of a system interrelate.

flowcharts

25. _____ involves prioritizing risks based on their probability and impact of occurrence. a. Performing qualitative risk analysis b. Identifying risks c. Planning risk responses d. Performing quantitative risk analysis

a. Performing qualitative risk analysis

41. _____ involves eliminating a specific threat, usually by eliminating its causes. a. Risk avoidance b. Risk acceptance c. Risk transference d. Risk mitigation

a. Risk avoidance

43. _____ involves doing whatever you can to make sure the positive risk happens. a. Risk exploitation b. Risk sharing c. Risk enhancement d. Risk acceptance

a. Risk exploitation

49. _____ are unplanned responses to risk events used when project teams do not have contingency plans in place. a. Workarounds b. Fallback plans c. Contingency plans d. Triggers

a. Workarounds

36. Performing qualitative and quantitative risk analyses are subprocesses of the _____ process of project risk management. a. planning b. executing c. monitoring and controlling d. closing

a. planning

23. The degree of uncertainty an entity is willing to take on in anticipation of a reward is a. risk appetite b. risk tolerance c. risk utility d. unknown risk

a. risk appetite

20. Those who are _____ have a higher tolerance for risk, and their satisfaction increases when more payoff is at stake. a. risk-seeking b. risk-averse c. risk-neutral d. risk-indifferent

a. risk-seeking

40. A _____ is a technique used to show the effects of changing one or more variables on an outcome. a. sensitivity analysis b. decision tree c. Monte Carlo analysis d. systems analysis

a. sensitivity analysis

22. _____ involves deciding how to approach and plan the risk management activities for the project. a. Identifying risks b. Planning risk management c. Performing qualitative risk analysis d. Performing quantitative risk analysis

b. Planning risk management

38. _____ analysis simulates a model's outcome many times to provide a statistical distribution of the calculated results. a. Sensitivity b. Systems c. Monte Carlo d. NPV

c. Monte Carlo

34. _____ are/is a qualitative risk analysis tool that maintains an awareness of risks throughout the life of a project in addition to identifying risks. a. SharePoint portal b. Probability/impact matrices or charts c. Expectations management matrix d. Top Ten Risk Item Tracking

d. Top Ten Risk Item Tracking

8. The psychology literature shows that individuals, working alone, produce fewer ideas than the same individuals produce through brainstorming in small, face-to-face groups.

false

55. The main output of the _____ process is the start of a risk register.

identifying risks