Deck 11: Project Risk Management

Question 1

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

Answer 1

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

Question 2

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

Answer 2

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

Question 3

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

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

Answer 3

B
Explanation: 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.

Question 4

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

Question 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

 Unknown risks can be managed proactively.

Question 12

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

Question 13

 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 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

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

Question 17

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

Question 18

 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 19

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

Question 20

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

Question 21

 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 

Question 22

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

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

Question 23

 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

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

 _____ 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

Question 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

Question 27

 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

Question 28

 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

Question 29

 Which type of person achieves a balance between risk and payoff?

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

Question 30

 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

Question 31

 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 32

 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

Question 33

 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

Question 34

 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.

Question 35

 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

Question 36

 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

Question 37

 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

Question 38

 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

Question 39

 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

Question 40

 _____ 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 41

 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

Question 42

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

Question 43

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

Question 44

 _____ 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 45

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

Question 46

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

Question 47

 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

Question 48

 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

Question 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

Question 50

 Which action involves allocating ownership of the risk to another party?

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

Question 51

 Which action involves eliminating a specific threat, usually by eliminating its causes?

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

Question 52

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

Question 53

 Which risks are direct results of implementing risk responses?

A) architectural
B) primary
C) residual
D) secondary

Question 54

 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

Question 55

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

Question 56

 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

Question 57

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

Question 58

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

Question 59

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

Question 60

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

Question 61

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

Question 62

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

Question 63

 List and briefly describe four methods for identifying risks.

Question 64

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

Question 65

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

Question 66

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

Question 67

 _____ are indicators or symptoms of actual risk events.

Question 68

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

Question 69

 _____ involves accepting the consequences should a risk occur.

Question 70

 Explain decision trees and expected monetary value.

Question 71

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

Question 72

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

Question 73

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

Question 74

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

Question 75

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

Question 76

 _____ 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 77

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

Question 78

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

Question 79

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