Deck 11: Project Risk Management

Question 1

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

Answer 1

True
Explanation: 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.

Question 2

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

Answer 2

True
Explanation: Quantitative risk analysis often follows qualitative risk analysis, yet both processes can be done together or separately. On some projects, the team may only perform qualitative risk analysis. The nature of the project and availability of time and money affect which risk analysis techniques are used. Large, complex projects involving leading-edge technologies often require extensive quantitative risk analysis.

Question 3

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

Answer 3

True
Explanation: The Microsoft Solution Framework (MSF) includes a risk management model that includes developing and monitoring a top ten master list of risks. MSF is the methodology Microsoft uses for managing projects.

Question 4

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

Question 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

Risk utility rises at a decreasing rate for a _____ person.

A)risk-seeking
B)risk-averse  
C)risk-neutral
D)risk-indifferent

Question 11

Unknown risks can be managed proactively.

Question 12

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

Question 13

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

Question 14

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

Question 15

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.

Question 16

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

Question 17

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

Question 18

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

Question 19

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.

Question 20

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

Question 21

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

Question 22

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

Question 23

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

Question 24

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

Question 25

_____ 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

Question 26

_____ 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

Question 27

_____ 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

Question 28

_____ 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

Question 29

Identifying risks is a subprocess of the _____ process of project risk management.

A)planning
B)executing  
C)monitoring and controlling
D)closing

Question 30

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.

Question 31

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

Question 32

_____ 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

Question 33

_____ 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

Question 34

A _____ person achieves a balance between risk and payoff.

A)risk-seeking
B)risk-averse  
C)risk-fearing
D)risk-neutral

Question 35

_____ 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

Question 36

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

Question 37

_____ 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

Question 38

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

Question 39

_____ 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

Question 40

_____ 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

Question 41

_____ involves eliminating a specific threat, usually by eliminating its causes.

A)Risk avoidance
B)Risk acceptance  
C)Risk transference
D)Risk mitigation

Question 42

_____ involves allocating ownership of the risk to another party.

A)Risk exploitation
B)Risk sharing  
C)Risk enhancement
D)Risk acceptance

Question 43

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

Question 44

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

Question 45

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

Question 46

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

Question 47

_____ 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

Question 48

_____ 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

Question 49

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

Question 50

_____ involves doing whatever you can to make sure the positive risk happens.

A)Risk exploitation
B)Risk sharing  
C)Risk enhancement
D)Risk acceptance

Question 51

_____ 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

Question 52

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

Question 53

_____ 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

Question 54

_____ 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.

Question 55

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

Question 56

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

Question 57

_____ risks refer to those that are direct results of implementing risk responses.

A)Architectural
B)Primary  
C)Residual
D)Secondary

Question 58

_____ 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

Question 59

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

Question 60

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

Question 61

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

Question 62

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

Question 63

_____ are indicators or symptoms of actual risk events.

Question 64

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

Question 65

List and briefly describe four methods for identifying risks.

Question 66

Explain the basic steps involved in performing a Monte Carlo analysis.

Question 67

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

Question 68

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

Question 69

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

Question 70

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

Question 71

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

Question 72

_____ involves accepting the consequences should a risk occur.

Question 73

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

Question 74

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

Question 75

List and briefly describe the six major processes involved in risk management.

Question 76

Explain decision trees and expected monetary value.

Question 77

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

Question 78

_____ 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.

Question 79

What are the four basic response strategies for negative risks? Describe each strategy.