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25 Cards in this Set
- Front
- Back
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Beth is the project manager for her company, and Marty, her supervisor, is concerned with the possibility of Beth accepting one of the project risks. Beth explains that this is a risk that should be accepted within the project. When is it appropriate to accept a project risk?
A. It is never appropriate to accept a project risk. B. All risks must be mitigated or transferred. C. It is appropriate to accept a risk if the project team has never completed this type of project work before. D. It is appropriate to accept a risk if the risk is in balance with the reward. |
D. Risks that are in balance with the reward are appropriate for acceptance.
A, B, and C are all incorrect because these solutions are all false responses to risk management. It certainly is appropriate to accept a project risk in some instances. Consider the weather or the dangerous nature of project work such as construction. You don’t have to mitigate or transfer all risks because some are worth accepting, exploiting, enhancing, or even sharing. Just because a project team has not done a particular type of work before does not equate to accepting risks. |
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Frances is the project manager of the LKJ Project. Which of the following techniques will she use to create the risk management plan?
A. Risk tolerance B. Status meetings C. Planning meetings D. Variance meetings |
C. Planning meetings are used to create the risk management plan. The project manager, project team leaders, key stakeholders, and other individuals with the power to make decisions regarding risk management attend the meetings.
A, B, and D are incorrect because these choices do not fully answer the question. |
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You are the project manager of the HQQ Project, and part of your requirement in this role is to create a risk management plan. Which of the following is not part of a risk management plan?
A. Roles and responsibilities B. Methodology C. Technical assessment board compliance D. Risk categories |
C. The technical assessment board may be used as part of the change control system. It is not relevant to risk management planning.
A is incorrect. Roles and responsibilities are a part of the risk management plan. B, methodology, is part of the risk management plan because it identifies the approaches, tools, and data sources for risk management. D, risk categories, is part of the risk management plan. |
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You are the project manager of the GHK Project. You and the manufacturer have agreed to substitute the type of plastic used in the product to a slightly thicker grade should there be more than a 7 percent error in production. The thicker plastic will cost more and require that the production slow down, but the errors should diminish. This is an example of which of the following?
A. Threshold B. Tracking C. Budgeting D. JIT manufacturing |
A. An error value of 7 percent represents the threshold under which the project is allowed to operate. Should the number of errors increase beyond 7 percent, the current plastic will be substituted.
B is incorrect because tracking is the documentation of a process through a system or workflow, or the documentation of events through the process. C, budgeting, is also incorrect, because the scenario deals with identifying the risk threshold, not the cost associated with the risk event. D, JIT manufacturing, is a scheduling approach to ordering the materials only when they are needed to keep inventory costs down. |
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Hans is a project manager for his organization, and he’s working with his sponsor to identify the organization’s risk tolerance. Understanding the risk tolerance and any associated enterprise environmental factors will help Hans and the project team plan for risk responses. An organization’s risk tolerance is also known as what?
A. The utility function B. Herzberg’s Theory of Motivation C. Risk acceptance D. The risk-reward ratio |
A. The utility function describes a person’s willingness to tolerate risk.
B is incorrect. Herzberg’s Theory of Motivation is an HR theory that describes motivating agents for workers. C is also incorrect. Risk acceptance describes the action of allowing a risk to exist because it is deemed low in impact, low in probability, or both. D, the risk-reward ratio, is incorrect. This describes the potential reward for taking a risk in the project. |
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As a project manager, you must understand the components of an identified risk, a risk response, a risk trigger, risk thresholds, and issues. A risk trigger is also called which of the following?
A. A warning sign B. A delay C. A cost increase D. An incremental advancement of risk |
A. Risk triggers can also be known as warning signs. Triggers signal that a risk is about to happen or has happened.
B, C, and D are all incorrect because these answers do not properly describe a risk trigger. |
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The customers of the project have requested additions to the project scope. The project manager brings notice that additional risk planning will need to be added to the project schedule. Why?
A. The risk planning should always take the same amount of time as the activities required by the scope change. B. Risk planning should always occur whenever the scope is adjusted. C. Risk planning should occur only at the project manager’s discretion. D. The project manager is incorrect. Risk planning does not need to happen at every change in the project. |
B. When the scope has been changed, the project manager should require risk planning to analyze the additions for risks to the project’s success.
A is incorrect. The scope changes may not require the same amount of time as the activities needed to complete the project changes. C is incorrect because risk planning should not occur at the project manager’s discretion. Instead, it should be based on evidence within the project and the policies adopted in the risk management plan. D is also incorrect. When changes are added to the project scope, risk planning should occur. |
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You are the project manager of your organization, and you’re working with your project team and the project stakeholders to identify the risks within the project. Some of the risks have not yet happened and some of the risks are already issues. You tell the project team that all risks must be documented in the risk register, but they are not familiar with this document. Which one of the following best describes the risk register?
A. It documents all of the outcomes of the other risk management processes. B. It’s a document that contains the initial risk identification entries. C. It’s a system that tracks all negative risks within a project. D. It’s part of the project’s PMIS for integrated change control. |
A. The risk register documents all of the outcomes of the other risk management processes.
Choices B, C, and D are all incorrect definitions of the risk register. |
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An understanding of the different types of risk events can help the project manager work better with the enterprise environmental factors and the organizational process assets that affect the risk management in a project. Based on this information, (a) _______________ include(s) fire, theft, or injury and offer(s) no chance for gain.
A. Business risks B. Pure risks C. Risk acceptance D. Life risks |
B. Pure risks are the risks that could threaten the safety of the individuals on the project.
A is incorrect because business risks affect the financial gains or loss of a project. C and D are incorrect because these terms are not relevant. |
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Complete this sentence: A project risk is a(n) _______________ occurrence that can affect the project for good or bad.
A. Known B. Dangerous C. Uncertain D. Known-unknown |
C. Risks are not planned—they are left to chance. The accommodation and the reaction to a risk can be planned, but the event itself is not planned. If risks could be planned, Las Vegas would be out of business.
A, B, and D are all incorrect because these terms do not accurately complete the sentence. Not all risks are known and certainly not all risks are unknown. In addition, not all risks are dangerous, but all risks are uncertain. |
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Risk identification is an iterative process in the project and it requires participation from the project manager, the project team, and other key stakeholders. Because of the nature of risk, when should risk identification happen?
A. As early as possible in the initiation process B. As early as possible in the planning process C. Throughout the product management life cycle D. Throughout the project life cycle |
D. Risk identification is an iterative process that happens throughout the project life cycle.
A and B are both incorrect because risk identification is not limited to any one process group. C is incorrect because risk identification technically happens throughout the project management life cycle, which is unique to each project, not the product management life cycle. |
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You are the project manager of the KLJH Project. This project will last two years and has 30 stakeholders. How often should risk identification take place?
A. Once at the beginning of the project B. Throughout the execution processes C. Throughout the project D. Once per project phase |
C. Risk identification happens throughout the project. Recall that planning is iterative—as the project moves toward completion, new risks may surface that call for identification and planned responses.
A is incorrect. Risk identification should happen throughout the project, not just at the beginning. B is incorrect because risk identification is part of planning. D is incorrect because the nature of the project phase may require and reveal more than one opportunity for risk identification. |
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You are the project manager of the HNN Project and you’re working with the project stakeholders, including the project team and the project sponsor, to identify risks within the project. The project sponsor wants to know which tools you’ll use to identify risk events. Which one of the following is an acceptable tool for risk identification?
A. Decision tree analysis B. Decomposition of the project scope C. The Delphi Technique D. Pareto charting |
C. The Delphi Technique, an anonymous risk identification method, is correct.
A is incorrect. Decision tree analysis is appropriate for calculating the expected monetary value of a decision, but not for risk identification. B is incorrect because the decomposition of the project scope will result in the WBS. D is incorrect. Creating a Pareto chart is part of quality control, not of risk identification. |
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You are the project manager for a project that will create a new and improved web site for your company. Currently, your company has more than 8 million users around the globe. You would like to poll experts within your organization with a simple, anonymous form asking about any foreseeable risks in the design, structure, and intent of the web site. With the collected information, subsequent anonymous polls are submitted to the group of experts. This is an example of _______________.
A. Risk identification B. A trigger C. An anonymous trigger D. The Delphi Technique |
D. An anonymous poll allowing experts to submit their opinion freely without fear of backlash is an example of the Delphi Technique.
A, B, and C are incorrect because they do not accurately answer the question. |
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As a PMP candidate, you must be familiar with the different approaches to risk identification. One approach is called SWOT. Which of the following describes SWOT?
A. An analysis of strengths, weakness, options, and timing B. An analysis of strengths, weakness, opportunities, and threats C. An elite project team that comes in and fixes project risks and threats D. Ratings of 1 to 100 |
B. SWOT analysis is part of risk identification and examines the strengths, weakness, opportunities, and threats of the project to make certain all possibilities for risk identification are covered.
A is incorrect because SWOT examines all four perspectives. C and D are incorrect because these ratings are part of quantitative-qualitative risk analysis. |
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You are the project manager of the GLI Project for your organization. Your project sponsor has asked that you use an approach to measure the probability and impact of the risk events and then to rank the events accordingly. Which risk analysis provides the project manager with a risk ranking?
A. Quantifiable B. Qualitative C. The utility function D. SWOT analysis |
B. The risk ranking is based on the qualitative values of very high, high, medium, low, and very low attributes of the identified risks.
A is incorrect because it is not relevant to the question. Look again—A is quantifiable, not quantitative. C is incorrect. Utility function describes an organization’s tolerance for risk. D, SWOT analysis, is part of risk identification. |
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A table of risks, their probability, their impact, and a number representing the overall risk score is called a _______________.
A. Risk table B. Probability and impact matrix C. Quantitative matrix D. Qualitative matrix |
B. A table of risks, their probability, and their impact equate to a risk score in a risk matrix.
A is incorrect because it does not fully answer the question. C and D are incorrect because a risk matrix can be used in both quantitative and qualitative risk analyses. |
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You are presented with the following table:
What is the EMV for Risk Event 3? A. $135 B. −$300 C. $45 D. −$135
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D. Risk Event 3 has a probability of 45 percent and an impact cost of −$300, which equates to −$135. A, B, and C are all incorrect values. The formula is to take the probability times the impact to find the Ex$V for each risk event. |
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You are presented with the following table:
Based on the preceding numbers, what is the amount needed for the contingency fund? A. Unknown with this information B. $249,000 C. $117,150 D. $15,750
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C. The probability times the impact shows the Ex$V. The sum of the Ex$V column reveals the risk exposure; the inverse is the ideal contingency reserve. The calculated amount for each of the risk events is shown in the following table: A, B, and D are incorrect because they do not reflect the contingency amount needed for the project based on the preceding table.
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The water sanitation project manager has determined that the risks associated with handling certain chemicals are too high. He has decided to allow someone else to complete this portion of the project, so he has outsourced the handling and installation of the chemicals and filter equipment to an experienced contractor. This is an example of which of the following?
A. Avoidance B. Acceptance C. Mitigation D. Transference |
D. Because the risk is not eliminated but transferred to someone else or another entity, it is considered transference.
A is incorrect because the risk still exists, but it is handled by another entity. B is incorrect because the project manager has not accepted the risk, deciding instead to allow another entity to deal with it. C is incorrect. The risk has not been mitigated in the project. |
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A project manager and the project team are actively monitoring the pressure gauge on a piece of equipment. Sarah, the engineer, recommends a series of steps to be implemented should the pressure rise above 80 percent. The 80 percent mark represents what?
A. An upper control limit B. The threshold C. Mitigation D. A workaround |
B. The 80 percent mark is a threshold.
A is incorrect. An upper control limit is a boundary for quality in a control chart. C is incorrect. Mitigation is a planned response should a risk event happen. D is also incorrect. A workaround is an action to bypass the risk event. |
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You are presented with the following table: What would Risk 6 be based on the following information: Marty is 60 percent certain that he can get the facility needed for $45,000, which is $7000 less than what was planned for? A. .60, $45,000, $27,000 B. .60, $52,000, $31,200 C. .60, $7000, $4200 D. .60, −$7000, −$4200
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C. Marty is 60 percent certain he can save the project $7000. The $4200 represents the 60 percent certainty of the savings.
A, B, and D are all incorrect because these values do not reflect the potential savings of the project. |
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What can a project manager use to determine whether it is better to make or buy a product?
A. A decision tree analysis B. A fishbone model C. An Ishikawa diagram D. An ROI analysis |
A. A decision tree model can separate the pros and cons of buying versus building.
B and C are both incorrect. A fishbone diagram and an Ishikawa diagram show cause and effect. D is incorrect because an ROI analysis does not answer the question as well as decision tree analysis. |
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B. Monte Carlo simulations can reveal multiple scenarios and examine the risks and probability of impact.
A, decision trees, help guide the decision-making process. C, a Pareto chart, helps identify the leading problems in a situation. D, Gantt charts, compare the lengths of activities against a calendar in a bar chart format. |
B. Monte Carlo simulations can reveal multiple scenarios and examine the risks and probability of impact.
A, decision trees, help guide the decision-making process. C, a Pareto chart, helps identify the leading problems in a situation. D, Gantt charts, compare the lengths of activities against a calendar in a bar chart format. |
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Gary is a project manager for his organization and he’s evaluating the risks within his project. Some of the risk events have a high impact, while other risk events have a low probability. In this project many risks have high-risk impact scores but an overall low-risk score. How is this possible?
A. The risk scores are graded on a bell curve. B. The probability of each risk is low. C. The impact of each risk is not accounted for until it comes to fruition. D. The risks are rated high, medium, or low. |
B. A risk can have a very high impact on the project, but inversely have an extremely low probability score. For example, the possibility of a tornado wrecking the project’s construction site would have a high impact if it happened, but the probability of it happening is relatively low.
A is incorrect and not relevant to the scenario. C is not a true statement. D is also incorrect. A model using high, medium, and low versus a numbering system would not alter the overall high- or low-risk score of the project. |
