Himanshu Agarwal

Not Just Another Project Manager

Project Risk Management

  1. Which of the following BEST describes the purpose of identifying risks in a project?
    • To eliminate all potential threats to the project.
    • To assign responsibility for each potential risk.
    • To understand potential events that could impact the project positively or negatively.
    • To create a detailed plan for every possible project scenario.
  2. A project manager is facilitating a risk identification meeting with the project team and key stakeholders. Which of the following techniques is MOST effective for generating a comprehensive list of potential risks?
    • Brainstorming
    • Monte Carlo analysis
    • Sensitivity analysis
    • Earned Value Management
  3. During the risk assessment process, a risk is determined to have a high probability of occurrence and a high impact on project objectives. According to a typical probability and impact matrix, how should this risk be categorized?
    • Low priority
    • Medium priority
    • High priority
    • Monitor only
  4. Which of the following is an example of a positive risk (opportunity) that could be identified in a project?
    • A key team member unexpectedly resigns.
    • A critical supplier goes out of business.
    • A new technology emerges that could significantly reduce development time.
    • Changes in government regulations require additional compliance measures.
  5. A project team has identified several potential risks and is now determining the likelihood of these risks occurring and their potential impact on the project. Which process are they currently performing?
    • Identify Risks
    • Plan Risk Management
    • Perform Qualitative Risk Analysis
    • Perform Quantitative Risk Analysis
  6. Which of the following outputs of the Identify Risks process provides a structured list of identified risks along with their descriptions?
    • Risk Management Plan
    • Risk Register
    • Risk Report
    • Issue Log
  7. A project manager is reviewing potential risks and wants to visually represent the hierarchy of identified risks. Which of the following tools would be MOST suitable for this purpose?
    • Probability and impact matrix
    • Risk breakdown structure (RBS)
    • Influence diagram
    • Tornado diagram
  8. Which of the following risk response strategies aims to increase the probability and/or positive impact of an opportunity?
    • Avoid
    • Mitigate
    • Enhance
    • Accept
  9. A project team decides to purchase insurance to cover potential financial losses due to a specific risk. Which risk response strategy are they employing?
    • Transfer
    • Escalate
    • Avoid
    • Accept
  10. During a project execution, a previously unidentified risk emerges. What is the FIRST thing the project manager should do?
    • Update the risk register.
    • Implement the contingency plan.
    • Assess the impact and probability of the new risk.
    • Inform the project sponsor immediately.
  11. Which of the following is a key input to the Plan Risk Management process?
    • Risk Register
    • Project Management Plan
    • Risk Report
    • Lessons Learned Register
  12. The risk management plan should include all of the following EXCEPT:
    • Roles and responsibilities for risk management activities.
    • Budget and schedule for risk management activities.
    • A list of all identified risks.
    • Risk categories.
  13. Which of the following techniques uses expected monetary value (EMV) to analyze potential outcomes of different project scenarios?
    • Sensitivity analysis
    • Monte Carlo analysis
    • Decision tree analysis
    • Probability and impact matrix
  14. A project has a 60% chance of a $100,000 profit and a 40% chance of a $50,000 loss. What is the expected monetary value (EMV) of this project?
    • $40,000
    • $80,000
    • $10,000
    • $20,000
  15. Which of the following risk response strategies involves changing the project plan to eliminate the risk or protect the project objectives from its impact?
    • Mitigate
    • Transfer
    • Avoid
    • Accept
  16. A project manager is monitoring the risk register and notices that the probability of a specific risk has increased significantly. What should the project manager do NEXT?
    • Ignore the change if the impact remains low.
    • Update the project management plan.
    • Re-assess the risk and its potential impact.
    • Immediately implement the contingency plan.
  17. Which of the following is a tool and technique used in the Monitor Risks process?
    • Risk breakdown structure
    • Probability and impact matrix
    • Risk audit
    • SWOT analysis
  18. The process of developing options and actions to enhance opportunities and reduce threats to the achievement of project objectives is known as:
    • Identify Risks
    • Perform Risk Analysis
    • Plan Risk Responses
    • Monitor Risks
  19. Which of the following is NOT a typical output of the Plan Risk Responses process?
    • Contingency plans
    • Fallback plans
    • Risk triggers
    • Risk register
  20. A risk trigger is BEST described as:
    • A potential event that could impact the project.
    • A symptom or warning sign that a risk is about to occur or has occurred.
    • The person responsible for managing a specific risk.
    • The financial reserve allocated to address potential risks.
  21. Which of the following stakeholders is typically MOST involved in the risk management process?
    • Project Team
    • Project Sponsor
    • Functional Managers
    • Customers
  22. What is the primary purpose of a risk audit?
    • To identify new risks that were not previously identified.
    • To assess the effectiveness of the risk management processes.
    • To determine the financial impact of realized risks.
    • To assign responsibility for managing identified risks.
  23. Which of the following is a quantitative risk analysis technique that models a range of potential outcomes by performing multiple simulations?
    • Sensitivity analysis
    • Expected monetary value analysis
    • Monte Carlo analysis
    • Decision tree analysis
  24. A project manager is concerned about the impact of a delay in a critical deliverable. Which risk analysis technique would be MOST helpful in determining the potential impact of this delay on the overall project schedule?
    • Probability and impact matrix
    • Sensitivity analysis
    • Risk register
    • SWOT analysis
  25. Which of the following risk response strategies is appropriate for risks with a low probability and low impact?
    • Avoid
    • Mitigate
    • Transfer
    • Accept
  26. During project closure, what should be done with the risk register?
    • Discard it as the project is complete.
    • Archive it as part of the project documents for future reference.
    • Update it with lessons learned about risk management.
    • Use it as a template for future projects.
  27. Which of the following is a common cause of project risks?
    • Effective communication
    • Clear project objectives
    • Changes in requirements
    • Adequate resource allocation
  28. A project team is brainstorming potential risks. Which of the following is a key principle for effective brainstorming?
    • Criticize ideas to ensure only the best are captured.
    • Encourage everyone to contribute, no matter how unusual the idea seems.
    • Focus on analyzing each risk as it is identified.
    • Limit the session to a small group of experts.
  29. Which of the following BEST describes a contingency reserve?
    • Funds allocated to address risks that are known and included in the risk register.
    • Funds allocated to address unforeseen risks that were not identified during planning.
    • Time added to the project schedule to account for potential delays.
    • Resources allocated to implement risk response plans.
  30. A project manager is reviewing the risk register and notices a risk with a high impact but a very low probability. What is the MOST appropriate course of action?
    • Ignore the risk due to its low probability.
    • Develop a full mitigation plan.
    • Monitor the risk and develop a contingency plan if necessary.
    • Transfer the risk to a third party.
  31. Which of the following is a key benefit of performing risk management throughout the project lifecycle?
    • It guarantees project success.
    • It eliminates all uncertainty.
    • It increases the likelihood of meeting project objectives.
    • It reduces the need for project management processes.
  32. Which of the following is NOT a typical element of a risk management plan?
    • Methodology
    • Roles and responsibilities
    • Risk thresholds
    • Project budget
  33. A project team is using a probability and impact matrix. A risk with a probability of 0.8 and an impact score of 0.7 would typically fall into which category if the threshold for high risk is 0.56 (probability * impact)?
    • Low
    • Medium
    • High
    • Monitor
  34. Which of the following is an example of a risk trigger?
    • A delay in the delivery of a key component exceeding one week.
    • The project manager holding a team meeting.
    • The project sponsor approving a change request.
    • The completion of a major project milestone.
  35. What is the purpose of the Monitor Risks process?
    • To identify new risks.
    • To analyze the probability and impact of risks.
    • To track identified risks, monitor residual risks, and identify new risks.
    • To develop risk response plans.
  36. Which of the following is a tool used in Perform Qualitative Risk Analysis?
    • Decision tree analysis
    • Monte Carlo simulation
    • Probability and impact matrix
    • Earned Value Analysis
  37. A project manager is facilitating a lessons learned session at the end of a project. What information related to risk management should be captured?
    • The total number of risks identified.
    • The names of the individuals responsible for each risk.
    • The effectiveness of the risk management processes and the outcomes of implemented risk responses.
    • The initial probability and impact scores of all identified risks.
  38. Which of the following risk response strategies involves sharing the burden of the risk with a third party?
    • Mitigate
    • Transfer
    • Enhance
    • Accept
  39. A project team has identified a risk that, if it occurs, will have a significant negative impact on the project schedule but a minimal impact on the budget. Which risk response strategy might be MOST appropriate?
    • Avoid
    • Mitigate the schedule impact
    • Transfer the budget impact
    • Accept the risk
  40. Which of the following is a key output of the Perform Quantitative Risk Analysis process?
    • Risk register updates
    • Probability and impact matrix
    • Risk report
    • Prioritized list of quantitative risks
  41. Which of the following BEST describes residual risks?
    • Risks that remain after risk responses have been implemented.
    • Newly identified risks that emerge during project execution.
    • Risks that were initially identified but later deemed insignificant.
    • The potential negative consequences of implementing risk response plans.
  42. What is the primary goal of risk management planning?
    • To identify all possible risks.
    • To define how risk management activities will be conducted.
    • To eliminate all risks from the project.
    • To assign responsibility for all identified risks.
  43. Which of the following is a common input to the Perform Qualitative Risk Analysis process?
    • Risk management plan
    • Project budget
    • Project schedule
    • Stakeholder register
  44. A project manager is using a decision tree to analyze different project paths based on potential risks and their associated outcomes. What is the primary benefit of using this technique?
    • It provides a visual representation of the risk breakdown structure.
    • It helps in calculating the expected monetary value of different decisions.
    • It prioritizes risks based on their probability and impact.
    • It simulates a large number of possible project outcomes.
  45. Which of the following is NOT a typical element of the risk register?
    • Identification number for each risk
    • Description of the risk
    • Probability and impact of the risk
    • Detailed work breakdown structure (WBS)
  46. Which of the following risk response strategies is most suitable for opportunities with a high probability and high positive impact?
    • Accept
    • Enhance
    • Share
    • Exploit
  47. A project manager is reviewing the project budget and notices a significant amount allocated as management reserve. What is the purpose of the management reserve?
    • To cover costs associated with implementing planned risk responses.
    • To cover costs associated with unforeseen risks that were not identified during planning.
    • To cover scope changes that are approved during the project.
    • To cover cost overruns due to poor project performance.
  48. Which of the following is a key characteristic of effective risk management?
    • Reactive
    • Isolated
    • Proactive
    • Optional
  49. During a project meeting, a stakeholder raises a new potential risk. What should the project manager do FIRST?
    • Immediately update the risk register.
    • Dismiss the risk if it was not identified earlier.
    • Assess the potential impact and probability of the new risk.
    • Assign responsibility for the risk to a team member.
  50. Which of the following is a benefit of using standardized risk categories in a project?
    • It ensures that all possible risks are identified.
    • It provides a structured approach to risk identification.
    • It eliminates the need for further risk analysis.
    • It automatically assigns risk owners.
Answers
  1. To understand potential events that could impact the project positively or negatively.
  2. Brainstorming
  3. High priority
  4. A new technology emerges that could significantly reduce development time.
  5. Perform Qualitative Risk Analysis
  6. Risk Register
  7. Risk breakdown structure (RBS)
  8. Enhance
  9. Transfer
  10. Assess the impact and probability of the new risk.
  11. Project Management Plan
  12. A list of all identified risks.
  13. Decision tree analysis
  14. $40,000
  15. Avoid
  16. Re-assess the risk and its potential impact.
  17. Risk audit
  18. Plan Risk Responses
  19. Risk register
  20. A symptom or warning sign that a risk is about to occur or has occurred.
  21. Project Team
  22. To assess the effectiveness of the risk management processes.
  23. Monte Carlo analysis
  24. Sensitivity analysis
  25. Accept
  26. Archive it as part of the project documents for future reference.
  27. Changes in requirements
  28. Encourage everyone to contribute, no matter how unusual the idea seems.
  29. Funds allocated to address unforeseen risks that were not identified during planning.
  30. Monitor the risk and develop a contingency plan if necessary.
  31. It increases the likelihood of meeting project objectives.
  32. Project budget
  33. High
  34. A delay in the delivery of a key component exceeding one week.
  35. To track identified risks, monitor residual risks, and identify new risks.
  36. Probability and impact matrix
  37. The effectiveness of the risk management processes and the outcomes of implemented risk responses.
  38. Transfer
  39. Mitigate the schedule impact
  40. Prioritized list of quantitative risks
  41. Risks that remain after risk responses have been implemented.
  42. To define how risk management activities will be conducted.
  43. Risk management plan
  44. It helps in calculating the expected monetary value of different decisions.
  45. Detailed work breakdown structure (WBS)
  46. Exploit
  47. To cover costs associated with unforeseen risks that were not identified during planning.
  48. Proactive
  49. Assess the potential impact and probability of the new risk.
  50. It provides a structured approach to risk identification.

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