PM-ks-C11-projRiskMgmt-myManyTests

26. Which process 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

ANSWER: d Performing quantitative risk analysis involves numerically estimating the effects of risks on project objectives.

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

ANSWER: risk

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.

ANSWER: c A project manager can chart the probability and impact of risks on a probability/impact matrix or chart, which lists the relative probability of a risk occurring and the relative impact of the risk occurring

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.T/F

False Although businesses use brainstorming widely to generate new ideas, the psychology literature shows that individual people working alone produce a greater number of ideas than they produce through brainstorming in small, face-to-face groups.

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

False Top Ten Risk Item Tracking is a qualitative risk analysis tool.

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

ANSWER: mitigation

27. Which process 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

ANSWER: b Planning risk responses involves taking steps to enhance opportunities and reduce threats to meeting project objectives.

45. Which action involves allocating ownership of the risk to another party? a. risk exploitation b. risk sharing c. risk enhancement d. risk acceptance

ANSWER: b Risk sharing involves allocating ownership of the risk to another party.

38. Which analysis technique 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

ANSWER: c RATIONALE: Feedback: Monte Carlo analysis simulates a model's outcome many times to provide a statistical distribution of the calculated results.

28. Which process 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. monitoring risk d. performing qualitative risk analysis

ANSWER: c Monitoring risk 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.

46. Which action 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

ANSWER: c Risk enhancement involves changing the size of the opportunity by identifying and maximizing key drivers of the positive risk.

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

ANSWER: c Unenforceable conditions or contract clauses, and adversarial relations are risk conditions associated with the project procurement management knowledge area.

QUESTION 14 The Microsoft Solution Framework (MSF) includes a risk management model that includes developing and monitoring a top-ten master list of risks. True False

true

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.

ANSWER: Risk factors

34. _____ is a qualitative risk analysis tool that maintains an awareness of risks throughout the life of a project in addition to identifying risks. a. A SharePoint portal b. A probability/impact matrix or chart c. An expectations management matrix d. Top Ten Risk Item Tracking

ANSWER: d Top Ten Risk Item Tracking is a qualitative risk analysis tool. In addition to identifying risks, it maintains an awareness of risks throughout the life of a project by helping to monitor risks.

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

ANSWER: known risks

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

ANSWER: negative

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

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

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

True The risk register is often a simple Microsoft Word or Excel file, but it can also be part of a more sophisticated database.

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

ANSWER: Identifying risks

61. _____ is a fact-finding technique for collecting information in face-to-face, phone, e-mail, or virtual discussions.

ANSWER: Interviewing

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

ANSWER: Residual

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

ANSWER: Risk acceptance

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

ANSWER: Risk utility

41. Which action involves eliminating a specific threat, usually by eliminating its causes? a. risk avoidance b. risk acceptance c. risk transference d. risk mitigation

ANSWER: a Risk avoidance involves eliminating a specific threat, usually by eliminating its causes.

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

ANSWER: identifying risks

n/a

*

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.

ANSWER: Brainstorming

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

ANSWER: a Risk exploitation involves doing whatever you can to make sure the positive risk happens.

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

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

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

ANSWER: Triggers

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

ANSWER: b Utility rises at a decreasing rate for a risk-averse person. In other words, when more payoff or money is at stake, a person or organization that is risk-averse gains less satisfaction from the risk, or has lower tolerance for the risk.

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

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

69. _____ are funds included in the cost baseline that can be used to mitigate cost or schedule overruns if known risks occur.

ANSWER: Contingency reserves (Contingency allowances)

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

ANSWER: Delphi

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

ANSWER: EMV (Expected monetary value)

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

ANSWER: risk register

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

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

5. The last step in project risk management is deciding how to address the knowledge area for a particular project by performing risk management planning. T/F

False The first step in project risk management is deciding how to address the knowledge area for a particular project by performing risk management planning.

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

Risk breakdown structure

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

Risk management plan

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. T/F

True A project manager can chart the probability and impact of risks on a probability/impact matrix or chart, which lists the relative probability of a risk occurring and the relative impact of the risk occurring.

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

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

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. T/F

True Monte Carlo analysis simulates a model's outcome many times to provide a statistical distribution of the calculated results. This 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.

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

True Project risk management involves understanding potential problems that might occur on the project and how they might impede project success. However, there are also positive risks or opportunities, which can result in good outcomes for a project.

13. The main output of qualitative risk analysis is updating the risk register. T/F

True The main output of qualitative risk analysis is updating the risk registers.

47. Which action 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

ANSWER: b Risk acceptance applies to positive risks when the project team cannot or chooses not to take any actions toward a risk.

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

Assess the range for the variables being considered....In other words, collect the most likely, optimistic, and pessimistic estimates for the variables in the model.

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

True The Delphi technique is an approach to gathering information that helps prevent some of the negative group effects found in brainstorming. The basic concept of the Delphi technique is to derive a consensus among a panel of experts who make predictions about future developments.

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

ANSWER: Sensitivity analysis

37. Which diagramming technique is 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

ANSWER: a A decision tree is a diagramming analysis technique used to help select the best course of action when future outcomes are uncertain. A common application of decision tree analysis involves calculating expected monetary value.

21. Which type of person achieves a balance between risk and payoff? a. risk-seeking b. risk-averse c. risk-fearing d. risk-neutral

ANSWER: d A risk-neutral person achieves a balance between risk and payoff. This person would evaluate decisions using a number of factors—risk is just one of them.

14. Large, complex projects involving leading-edge technologies often require extensive quantitative risk analysis. T/F

True Large, complex projects involving leading-edge technologies often require extensive quantitative risk analysis.

32. Which document contains results of various risk management processes; it is often displayed in a table or spreadsheet format? a. risk register b. influence diagram c. process flow chart d. work breakdown structure

ANSWER: a A risk register is a document that contains results of various risk management processes; it is often displayed in a table or spreadsheet format.

44. Which action 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

ANSWER: c Risk transference involves shifting the consequence of a risk and responsibility for its management to a third party.

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. Collect the most likely, optimistic, and pessimistic estimates for the variables in the model. d. Run a deterministic analysis or one pass through the model using the combination of values selected for each one of the variables.

ANSWER: c The first step in Monte Carlo analysis if to collect the most likely, optimistic, and pessimistic estimates for the variables in the model.

31. Which 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

ANSWER: d Interviewing is a fact-finding technique for collecting information in face-to-face, phone, e-mail, or instant-messaging discussions. Interviewing people with similar project experience is an important tool for identifying potential risks.

48. Which risks are direct results of implementing risk responses? a. architectural b. primary c. residual d. secondary

ANSWER: d Secondary risks are a direct result of implementing a risk response.

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

False Expected monetary value (EMV) is the product of a risk event probability and the risk event's monetary value. Because the EMV provides an estimate for the total dollar value of a decision, you want to have a positive number; the higher the EMV, the better.

4. Unknown risks can be managed proactively. T/F

False Known risks can be managed proactively. However, unknown risks, or risks that have not been identified and analyzed, cannot be managed.

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

True There are a number of possible actions that project managers can take to avoid, lessen, change or accept the potential effects of risk on their projects.

22. What process 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

ANSWER: b Planning risk management involves deciding how to approach and plan risk management activities for the project.

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

ANSWER: risk owner

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

ANSWER: risk register

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

ANSWER: risk-averse

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

ANSWER: watch list

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

ANSWER: workarounds

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

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

40. Which technique is 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

ANSWER: a A sensitivity analysis is a technique used to show the effects of changing one or more variables on an outcome.

23. The main outputs of which process include a risk register, risk report, and project documents updates? a. identifying risks b. planning risk management c. planning risk response d. monitoring risk.

ANSWER: a Identifying risks = determining which risks are likely to affect a project and documenting the characteristics of each. The main outputs = a risk register, risk report, and project documents updates

24. Which process involves determining what 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

ANSWER: a Identifying risks involves determining what risks are likely to affect a project and documenting the characteristics of each. The main output of this process is the start of a risk register.

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

ANSWER: a Identifying risks is a subprocess of the planning process of project risk management.

25. Which process 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

ANSWER: a Performing qualitative risk analysis involves prioritizing risks based on their probability and impact of occurrence. After identifying risks, project teams can use various tools and techniques to rank risks and update information in the risk register.

36. Which process involves prioritizing risks based on their probability of occurrence and impact? a. performing qualitative risk analysis b. planning risk management c. monitoring and controlling risks d. project closing

ANSWER: a Performing qualitative risk analysis involves prioritizing risks based on their probability of occurrence and impact.

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

ANSWER: a Those who are risk-seeking have a higher tolerance for risk, and their satisfaction increases when more payoff is at stake. A risk-seeking person prefers outcomes that are more uncertain and is often willing to pay a penalty to take risks.

42. Which action 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

ANSWER: d Risk mitigation involves reducing the impact of a risk event by reducing the probability of its occurrence.