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Jenny is working with her team and SMEs to prioritize identified risks for further analysis. They decide to use a five-point scale of very low (VL), low (L), medium (M), high (H), and very high (VH) to assess the likelihood and impact of risk events. This process may be best described as Quantitative risk analysis Five-point quantitative assessment Probability scaling technique Qualitative risk analysis

Qualitative risk analysis

In risk management, the term benefit is used to refer to 1. An opportunity that has occurred 2. A risk that has been avoided 3. The possibility of variability in a team's productivity 4. A risk that has been materialized

1. All organizations face the uncertainty of both internal and external events. Uncertain present and future challenges can be dealt with by formulating and applying a sound business strategy toward realizing a set of objectives and managing risks. Risk management provides insight into risks that need to be addressed in support of reaching those objectives and takes advantage of opportunities. When opportunities occur, they are called benefits.

A chart that displays the activities driving the project duration and causing delays is called: A duration sensitivity chart A risk sensitivity chart A waterfall chart A range of uncertainty chart

A duration sensitivity chart

You have just been selected as the project manager of a high risk project. You and your project team are working with key stakeholders to develop a risk management plan (RMP). Which of the following documents you may need to develop your RMP? Schedule management plan Cost management plan Scope management plan All of the above

AOTA. Plan Risk Management is the process of defining how to conduct risk management activities for a project. Inputs to that process include the scope management plan, cost management plan, schedule management plan, communications management plan, the enterprise environmental factors, and the organizational process assets.

You have just been selected as the project manager of a high risk project. You and your project team are working with key stakeholders to develop a risk management plan (RMP). Which of the following documents you may need to develop your RMP? Cost management plan Schedule management plan Scope management plan All of the above

All. Plan Risk Management is the process of defining how to conduct risk management activities for a project. Inputs to that process include the scope management plan, cost management plan, schedule management plan, communications management plan, the enterprise environmental factors, and the organizational process assets.

In qualitative risk analysis, the project team sometimes uses a numeric scale and a color coding system assigning red, yellow and green to a pre-determined value range. This color coding system breaks the risks into groups requiring different level of attention. Green risks are those that (selected the best answer). Require more attention Should be closely monitored Are of least concern Can be ignored

Are of least concern

A risk response strategy that usually reduces the post-mitigation probability of a risk to zero is Transfer Mitigate Avoid Accept

Avoid

In a brainstorming session, Frank Thomson was asked to identify a risk that may affect the F4045 project. He said, "A change in government regulations may require additional investment leading to a loss of profit." What is the best category for this risk? (Select the best answer). Project management risk Technical risk Business risk Schedule risk

Business risk

Each risk event has three components which may be best described as Probability, Impact, and Matrix Probability, Success, and Indicator Cause, Probability, and Impact Score, Impact, and Event

Cause, Probability, and Impact. Risk is an uncertain event or condition that, if it occurs, may have a positive or a negative effect on at least one project objective. Objectives can include scope, schedule, cost, and quality. A risk may have one or more causes and, if it occurs, it may have one or more impacts. Because risk is a future event, each risk has a probability that it may or may not occur.

All of the following stakeholders are included in the risk identification process except: Suppliers Customers Competitors Sub-contractors

Competitors, The risk identification process should not be limited to just the core team. Input from customers, sponsors, subcontractors, vendors, and other stakeholders should be solicited.

Which of the following best describes the format of a risk statement? Impact may occur ... Causing Event Event may occur ...Causing Impact How Event..... So Impact What Cause... May cause Effect

Event may occur ...Causing Impact

What is the most appropriate name for a risk event that has already occurred? A story A tale An issue All of the above are names used for a materialized risk event

Issue. Risk should be treated as a future phenomenon. A project risk that has occurred can be considered as an issue.

In project risk management, contingency reserves are calculated for identified risks sometimes called Known to know Known-knowns Unknowns we know Known-unknowns

Known-unknowns

Daisy claims that she is 90% confident that the project TS-2050 will cost less than $1,000,000. Which tool did she use to support her claim? Monte Carlo simulation Qualitative risk analysis Scenario analysis Brainstorming techniques

Monte Carlo simulation: Monte Carlo simulation is a statistical analysis technique that can be applied in situations in which there are uncertain estimates, with the aim of reducing the level of uncertainty through a series of simulations. In this sense, it can be applied in the analysis of risks associated with a particular objective. For each of the variables, Monte Carlo simulations do not provide a single estimate, but a range of possible estimates associated with each estimate and the level of probability that that estimate is accurate.

The attempt to increase the probability and impact of positive events, and decrease the probability and impact of negative events in the project is known as: Risk Management Monte Carlo Simulation Risk recognition Hazard management Contingency Planning

Risk Management. The risk management life cycle describes a structured approach for undertaking a comprehensive view of risk throughout the enterprise, portfolio, program, and project domains. Even though the way of managing risks differs between these domains and from one organization to another, an overall life cycle approach outlines a sequence of logical phases that can be iterated and includes the following processes: Plan Risk Management, Identify Risks, Perform Qualitative Risk Analysis, Perform Quantitative Risk Analysis, Plan Risk Responses, Implement Risk Responses, and Monitor Risks. The objectives of Project Risk Management are to increase the probability and impact of positive events and decrease the probability and impact of negative events in the project. Contingency planning is an element of risk management.

Which of the following is not included in the risk management process? Risk analysis Risk planning Risk identification Risk attitudes

Risk attitudes. Project Risk Management includes the processes of conducting risk management planning, identification, analysis (qualitative and quantitative), response planning, and monitoring and control on a project. The objectives of Project Risk Management are to increase the probability and impact of positive events, and decrease the probability and impact of negative events in the project. Risk attitudes are factors such perception, tolerances, and other biases that affect people and organizations' choices when making decisions under conditions of risk.

When assessing risk, the risk assessment team must keep in mind that some risks may have a window of time during which they may occur. This concept is known as: Risk framing Risk proximity Risk ventana Risk window of opportunity

Risk proximity

When assessing risk, the risk assessment team must keep in mind that some risks may have a window of time during which they may occur. This concept is known as: Risk ventana Risk window of opportunity Risk framing Risk proximity

Risk proximity

Which of the following is an artifact created from the risk identification process? (Select all that applies). Activity cost estimates Risk management plan Risk register Stakeholder register

Risk register. Identify Risks is the process of determining which risks may affect the project and documenting their characteristics. The main outputs from Identify Risks are typically contained in the risk register.

A risk management tool that is divided into three color-coded zones representing High, medium, and low risks is the risk: Assessment form Impact assessment Responsibility matrix Risk severity matrix

Risk severity matrix. The risk severity matrix provides a basis for prioritizing which risks to address. Red zone risks receive first priority followed by yellow zone risks. Green zone risks are typically considered inconsequential and ignored unless their status changes.

Organizations perceive risk as the effect of uncertainty on their project and organizational objectives. Organizations and stakeholders are willing to accept varying degrees of risk. This is called Risk-taking Risk tolerance Risk avoidance Risk conditions

Risk tolerance. People and/or organizations can be risk-seeking, risk-averse, or risk-neutral. Risk utility or risk tolerance is the amount of satisfaction or pleasure received from a potential payoff. In a project environment, organizations and stakeholders are willing to accept varying degrees of risk depending on their risk tolerance.

An uncertain event or condition that, if it occurs, has a positive or negative effect on a project's objectives is termed. A disaster Bad luck Hazard A probability Risk

Risk! According to the PMI (2021), Risk is an uncertain event or condition that, if it occurs, may have a positive or a negative effect on at least one project objective. Objectives can include scope, schedule, cost, and quality. A risk may have one or more causes and, if it occurs, it may have one or more impacts.

A risk management tool that is divided into three color-coded zones representing High, medium, and low risks is the risk: Risk severity matrix Assessment form Responsibility matrix Impact assessment

Severity. The risk severity matrix provides a basis for prioritizing which risks to address. Red zone risks receive first priority followed by yellow zone risks. Green zone risks are typically considered inconsequential and ignored unless their status changes.

Perform Qualitative Risk Analysis is usually a rapid and cost-effective means of establishing priorities for Plan Risk Responses and lays the foundation for Perform Quantitative Risk Analysis, if required. True False

In a brainstorming session, Melanie Laurent was asked to identify a risk that may affect the F4045 project. She said, "Due to an error in design, scope change may occur, which may lead to cost and/or schedule overrun" What is the best category for this risk? (Select the best answer). Operational risk Project management risk Business risk Correct Answer Technical risk

Technical risk

Which of the following would not be considered a threat? International disruptions Inflation Top management commitment Competition

Top management commitment

True

Some of the core principles that underlie the process of risk management are: -Strive to achieve excellence in the practice of risk management -Align risk management with organizational strategy and governance practices -Focus on the most impactful risks -Balance the realization of value against overall risks -Foster a culture that avoids risk taking -Continuously improve risk management competencies

all but foster...There are specific core principles that underlie the process of risk management. The seven principles listed below guide the risk management processes and are integral to effective risk management. Strive to achieve excellence in the practice of risk management. Align risk management with organizational strategy and governance practices Focus on the most impactful risks Balance the realization of value against overall risks Foster a culture that embraces risk management Navigate complexity using risk management to enable successful outcome Continuously improve risk management competencies.

Some of the core principles that underlie the process of risk management are: -Focus on the most impactful risks -Align risk management with organizational strategy and governance practices -Continuously improve risk management competencies -Strive to achieve excellence in the practice of risk management -Balance the realization of value against overall risks -Foster a culture that avoids risk taking

all but last (foster). There are specific core principles that underlie the process of risk management. The seven principles listed below guide the risk management processes and are integral to effective risk management. Strive to achieve excellence in the practice of risk management. Align risk management with organizational strategy and governance practices Focus on the most impactful risks Balance the realization of value against overall risks Foster a culture that embraces risk management Navigate complexity using risk management to enable successful outcome Continuously improve risk management competencies.

Which of the following statements is true regarding an organization's risk exposure? 1. The risk exposure of an organization is a measure of its potential future loss resulting from a business activity. 2. The total risks identified in a project through a scan of the eternal business environment. 3. The sum of the risks with the highest probability of occurrence 4. The total risks identified in a project through a scan of the internal business environment

1. An individual risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more objectives. Overall risk is the effect of uncertainty that affects organizational objectives at different levels or aspects. Risk arises from all sources of uncertainty, including individual risks in the portfolio, program, and project domains. These risks represent the exposure of the organization and its stakeholders to the consequences of uncertainty on the realization of the organization's strategy and business objectives. Once the risk occurs, it is then managed within the various governance layers (enterprise, portfolio, program, and project) by driving the resulting outcomes. The risk exposure of an organization is a measure of its potential future loss resulting from a business activity such as a project. An analysis of the risk exposure for a business often ranks risks according to their probability of occurring multiplied by the potential loss if they do. By ranking the probability of potential losses, a business can determine which losses are minor and which are significant enough to warrant investment.

Which of the following statements is true regarding an organization's risk exposure? 1. The risk exposure of an organization is a measure of its potential future loss resulting from a business activity. 2. The total risks identified in a project through a scan of the internal business environment 3. The total risks identified in a project through a scan of the eternal business environment. 4. The sum of the risks with the highest probability of occurrence

According to the PMI's risk management framework, the initial step in the risk management process is to 1. Plan risk management 2. Assess the risk potential 3. Appoint a risk manager 4. Determine the level of acceptable risk 5. Set aside budget funds for managing the risks

1. Project Risk Management includes the processes of conducting risk management planning, identification, analysis (qualitative and quantitative), risk response planning, implementing risk responses, and monitoring project risks.

You are the project manager for a software development project. You and your team scheduled a meeting with the purpose of creating a list of risks that may affect the project objectives. Which of the following best describes your meeting purpose? (Select the best answer) 1. Risk Identification 2. Risk listing and quantification 3. Plan risk management 4. Qualitative risk analysis

1. Risk identification. This answer is correct. Identify Risks is the process of determining which risks may affect the project and documenting their characteristics.

Which of the following statements is not true about risk management? 1. Risk management allows an organization to avoid all negative risks or threats. 2. Risk management allows an organization to improve decision making. 3. Risk management supports organizational agility and resilience. 4. Risk management allows an organization to anticipate and manage change.

1. The practice of risk management includes planning the approach, identifying, and analyzing risks, response planning and implementation, and ongoing monitoring of risks. Risk management allows an organization to: Anticipate and manage change, Improve decision making, Proactively implement typically lower-cost preventive actions instead of higher-cost reaction to issues, Increase the chances to realize opportunities for the benefit of the business, Generate broad awareness of uncertainty of outcomes, Act upon the transformations taking place in its business environment, and Support organizational agility and resilience

Which of the following statements is false? (Select the best answer) 1. Identify Risks is an iterative process because new risks may evolve or become known as the project progresses through its life cycle. 2. Identify risks is a team activity. It requires the project manager and project team members to work with key project stakeholders. 3. Identify Risks is the process of determining which risks may affect the project and documenting their characteristics. 4. Identify risks is a one-time process. It requires the project manager to identify and analyze carefully all risk events that may affect a project's goals.

4. is false. Risk identification is an iterative process. The probability and impacts of risk events may change as the project progresses. Risk identification is a team activity. It requires a participative approach to be successful.

Which of the following statements is an example of a risk transference strategy? 1. Changing the scope of a deliverable. 2. A fixed-price contract with a supplier. 3. Planning on-the-job training for project workers. 4. Identification of an alternative supplier.

2. A fixed-price contract with a supplier.

Which of the following statements best describes the reason why organizations should adopt a risk management system? 1. Risk is present in the information technology communication (ITC) industry sector, which requires all other sectors to implement risk management processes. 2. Risks may offer organizations a competitive advantage when both threats and opportunities are managed proactively. 3. Risk management requires organizations to perform a cost-benefit analysis for all projects. 4. Risk management and risk analytics require sophisticated tools that the competition may not be able to access.

2. Risk is inherently present in all organizations. Risks present organizations with challenges but may also offer a competitive advantage when both threats and opportunities are managed proactively. Risk management provides a comprehensive and integrated framework for addressing and managing risk at all levels of the organization, from portfolios through programs, projects, and operations.

Which of the following statements is not true about risk management? 1.Risk management supports organizational agility and resilience. 2.Risk management allows an organization to improve decision making. 3.Risk management allows an organization to anticipate and manage change. 4. Risk management allows an organization to avoid all negative risks or threats.

4. Risk management allows an organization to avoid all negative risks or threats. The practice of risk management includes planning the approach, identifying, and analyzing risks, response planning and implementation, and ongoing monitoring of risks. Risk management allows an organization to: Anticipate and manage change, Improve decision making, Proactively implement typically lower-cost preventive actions instead of higher-cost reaction to issues, Increase the chances to realize opportunities for the benefit of the business, Generate broad awareness of uncertainty of outcomes, Act upon the transformations taking place in its business environment, and Support organizational agility and resilience

The term expected monetary value (EMV) is used to define A promise made by a company to a customer or market segment. A mathematical model to measure and monitor the level of work completed on a project against the baseline plan. A statistical technique used to quantify risks when the outcomes are uncertain. The gap between the price of a product or service and the cost of producing it.

A statistical technique used to quantify risks when the outcomes are uncertain.

Joseph Masiano DiTutto is a project manager at Redenti Ltd. He is currently working with his project team members and key stakeholders to develop a document which defines how to conduct risk management activities for a project. What is the most appropriate name for this document (select the best answer)? A contingency plan A risk register A risk management plan A Risk identification plan A disaster management plan

A risk management plan. Plan Risk Management is the process of defining how to conduct risk management activities for a project. Planning for risks is important to ensure that the degree, type, and visibility of risk management are commensurate with both the risks and the importance of the project to the organization. Planning is also important to provide sufficient resources and time for risk management activities, and to establish an agreed-upon basis for evaluating risks. Risk management is essentially a team activity.

During the Identify Risks process, the project manager, the project team members and key project' s stakeholders, work together to create a list of risks that may affect the project's outcomes. Identified risks during this process are recorded into a document called a risk register. Identified risks in the risk register are usually structured in a format called: A risk effect A risk probability A risk event A risk statement

A risk statement. Identified risks during the risk identification process are recorded into a risk register and are structured in a format called a risk statement.

In risk management, the term benefit is used to refer to A. A risk that has been materialized B. The possibility of variability in a team's productivity C. An opportunity that has occurred D. A risk that has been avoided

C. All organizations face the uncertainty of both internal and external events. Uncertain present and future challenges can be dealt with by formulating and applying a sound business strategy toward realizing a set of objectives and managing risks. Risk management provides insight into risks that need to be addressed in support of reaching those objectives and takes advantage of opportunities. When opportunities occur, they are called benefits.

The process "Plan Risk Responses" develops the set of actions required to consider the risks and their characteristics and integrates them into corresponding plans and budgets. Which of the following is one of the categories of techniques used to identify risk responses? Creativity techniques designed to turn a risk response into action. Program Evaluation and Review Techniques (PERT) designed to qualify each risk Implementation techniques to identify potential responses. Decision-support techniques to determine the optimal potential response.

Decision-support techniques to determine the optimal potential response.

In project risk analysis, task duration uncertainty can be modeled using: Probabilistic estimates Bottom-up estimates Most likely estimates Deterministic estimates

Probabilistic estimates

When assessing the seriousness of a risk, a project or a risk manager tends to look at two main factors: Cost and quality Cost and time Probability and Impact Impact and Cost

Probability and Impact

When the outcome of an event in not certain, project managers use a specific tool and technique to predict the potential outcome. This tool is best described as Bottom-up estimating Probability distributions Earned Value Technique Checklist analysis

Probability distributions

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