Deck 11: Project Risk Management

Question 1

Good project risk management never goes unnoticed.

Answer 1

False

Question 2

A simple approach to using probability/impact information is to calculate risk factors.

Answer 2

False

Question 3

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

Answer 3

False

Question 4

Potential risks can only be identified early in a project.

Question 5

SWOT analysis can be used during risk identification by having project teams focus on the broad perspectives of potential risks for particular projects.

Question 6

The level of detail included in the risk management plan rarely varies across projects.

Question 7

Few organizations develop their own risk questionnaires.

Question 8

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 9

It is uncommon for people to identify problems or opportunities without really understanding them.

Question 10

A potential response to the risk event of a defective server might be the inclusion of a clause in a contract with the supplier to replace a defective server within a certain time period at a negotiated cost.

Question 11

The cost for risk management should not exceed the potential benefits.

Question 12

Negative and positive risks should always be included in the same probability/impact matrix or chart.

Question 13

You can break down the technology risk category into hardware,software,and network technology.

Question 14

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

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

Before you can improve project risk management,you must understand what risk is.

Question 17

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

Question 18

Risk management is a frequently overlooked aspect of project management.

Question 19

By reviewing the project scope statement,cost,schedule,and communications management plans,enterprise environmental factors,and organizational process assets,project teams can discuss and analyze risk management activities for their particular projects.

Question 20

Negative risk management is like investing in opportunities.

Question 21

The lower the EMV,the better.

Question 22

KLCI Research Group's 2001 survey revealed that ____ percent of the participants said they had procedures in place to identify and assess risk.

A)75
B)87
C)97
D)99

Question 23

A risk management review accomplishes one objective: it keeps management and the customer aware of the major influences that could prevent or enhance the project's success.

Question 24

Selecting the most experienced project manager is recommended for reducing schedule risks.

Question 25

Quantitative risk analysis and qualitative risk analysis must be done together.

Question 26

KLCI Research Group's 2001 survey revealed that the most frequently cited benefit from software risk management practices is to ____.

A)prevent surprises
B)improve ability to negotiate
C)meet customer commitments
D)anticipate/avoid problems

Question 27

William Ibbs and Young H.Kwak's study revealed that the ____ industry had the lowest level of project management maturity in the area of quality management.

A)engineering/construction
B)telecommunications
C)information systems
D)high-tech manufacturing

Question 28

A ____ person achieves a balance between risk and payoff.

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

Question 29

KLCI Research Group's 2001 survey revealed that ____ percent identified anticipating and avoiding problems as the primary benefit of risk management.

A)60
B)80
C)89
D)99

Question 30

William Ibbs and Young H.Kwak's study revealed that the ____ industry had the lowest level of project management maturity in the area of risk management.

A)engineering/construction
B)telecommunications
C)information systems
D)high-tech manufacturing

Question 31

The main output of qualitative risk analysis is a decision tree.

Question 32

Project risk management does not stop with the initial risk analysis.

Question 33

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 34

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 35

Increasing the project manager's authority is a strategy for mitigating technical and cost risks.

Question 36

There are ____ major processes involved in risk management.

A)three
B)four
C)five
D)six

Question 37

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

Question 38

KLCI Research Group's 2001 survey revealed that ____ percent of the organizations surveyed had a Project Management Office.

A)64
B)75
C)85
D)94

Question 39

Utility rises at a decreasing rate for a ____ person.

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

Question 40

Several PC-based software packages are available that perform Monte Carlo simulations.

Question 41

____ 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 42

____ 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 43

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 44

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)EMV
C)Monte Carlo analysis
D)watch list

Question 45

"Is there a project champion?" applies to which risk category? ____

A)Financial risk
B)Technology risk
C)Structure/process risk
D)People risk

Question 46

According to the Standish Group's success potential scoring sheet,____ has the highest relative importance.

A)executive management support
B)clear statement of requirements
C)proper planning
D)user involvement

Question 47

Poor conflict management,poor project organization and definition of responsibilities,and absence of leadership are risk conditions associated with the ____ project management knowledge area.

A)Integration
B)Quality
C)Time
D)Human Resources

Question 48

"If the information technology project is to produce a new product or service,will it be useful to the organization or marketable to others?" applies to which risk category? ____

A)Financial risk
B)Technology risk
C)Structure/process risk
D)Market risk

Question 49

____ involves numerically estimating the effects of risks on project objectives.

A)Performing qualitative risk analysis
B)Planning risk responses
C)Planning risk management
D)Performing quantitative risk analysis

Question 50

____ involves taking steps to enhance opportunities and reduce threats to meeting project objectives.

A)Performing quantitative risk analysis
B)Planning risk responses
C)Monitoring and controlling risk
D)Performing qualitative risk analysis

Question 51

A project manager can chart the probability and impact of risks on a ____.

A)risk ranking chart
B)risk probability table
C)probability/impact matrix
D)risk assessment matrix

Question 52

____ is a fact-finding technique for collecting information in face-to-face,phone,e-mail,or instant-messaging discussions.

A)Brainstorming
B)SWOT analysis
C)The Delphi technique
D)Interviewing

Question 53

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)system flow chart

Question 54

"Will the project meet NPV,ROI,and payback estimates?" applies to which risk category? ____

A)Financial risk
B)Technology risk
C)Structure/process risk
D)Market risk

Question 55

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

A)Fallback plans
B)Contingency reserves
C)Contingency plans
D)Contingency allowances

Question 56

____ involves prioritizing risks based on their probability and impact of occurrence.

A)Performing qualitative risk analysis
B)Planning risk management
C)Planning risk responses
D)Performing quantitative risk analysis

Question 57

____ are/is a qualitative risk analysis tool,and in addition to identifying risks,it maintains an awareness of risks throughout the life of a project.

A)Risk factor analysis
B)Probability/impact matrices or charts
C)Risk registering
D)Top Ten Risk Item Tracking

Question 58

____ 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 and controlling risk
D)Performing qualitative risk analysis

Question 59

____ are developed for risks that have a high impact on meeting project objectives,and are put into effect if attempts to reduce the risk are not effective.

A)Fallback plans
B)Contingency reserves
C)Contingency plans
D)Contingency allowances

Question 60

In a risk breakdown structure,competitors,suppliers,and cash flow are categories that fall under ____ risk.

A)business
B)technical
C)organizational
D)project management

Question 61

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

Question 62

____ involves allocating ownership of the risk to another party.

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

Question 63

____ 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 64

_________________________ are provisions held by the project spons

Question 65

____ analysis simulates a model's outcome many times to provide a statistical distribution of the calculated results.

A)Decision tree
B)EMV
C)Monte Carlo
D)Watch list

Question 66

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

Question 67

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 68

____ 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 69

Risk management can have a(n)____________________ impact on selecting projects,determining the scope of projects,and developing realistic schedules and cost estimates.

Question 70

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

Question 71

____ 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 72

____ 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 73

Inadequate planning,poor resource allocation,poor integration management,and lack of post-project review are risk conditions associated with the ____________________ project management knowledge area.

Question 74

____ risks are a direct result of implementing a risk response.

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

Question 75

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

Question 76

Given that all projects involve ____________________ that can have negative or positive outcomes,the question is how to decide which projects to pursue and how to identify and manage project risk throughout a project's life cycle.

Question 77

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

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

Question 78

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

Question 79

____ 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 80

The idea of striving to balance risks and opportunities suggests that different organizations and people have different ____________________ for risk.