Quiz 9: Risk Management Quiz

Multiple Choice

A project manager has just started the risk management process on a project. Which of the following statements accurately describes the objectives of risk management on a project?

• Risk management is done to increase the probability and/or impact of positive risks

• Risk management is done to decrease the probability and/or impact of negative risks

• Risk management is done to minimize all risks

• Risk management is done to increase the probability and/or impact of positive risks and decrease the probability and/or impact of negative risks

The objectives of project risk management include increasing the probability and/or impact of positive risks and decreasing the probability and/or impact of negative risks.

Multiple Choice

While discussing risk management with a team member, what should the project manager say about the different risk levels?

• There are two levels: individual project risks and overall project risks

• There is only one level of risk: individual project risks

• There is only one level of risk: overall project risks

• There are two levels: project risks and operations risks

The risk management process in the PMBOK lists two levels of project risks: individual and overall project risks.

Multiple Choice

A team member stops the project manager during the meeting to ask about positive risks. Which of the following statements about positive risks is false?

• Positive risks can lead to a shortened schedule

• positive risks can lead to a longer schedule

• Positive risks can lead to a smaller budget

• Project risks lead to more customer satisfaction

Positive risks are also known as opportunities and will impact the project positively. This can include shortening the schedule budget and increasing customer satisfaction.

Multiple Choice

Which of the following statements is false in regard to how risk will affect the project?

• Risk will continue to emerge during the lifetime of the project

• Risks should be monitored and managed as the project progresses

• Risk identification should only be done at the beginning of the project

• Risk identification is done throughout the project

Risk identification is done throughout the project. As the project progresses, new risks will emerge and will have to be assessed by the project team.

Multiple Choice

What kind of risk is about uncertainties that exist regarding what might happen in the future and cannot be predicted currently, such as regulatory frameworks or the future development of technology?

• Ambiguity Risks

• Variability Risks

• Project Resilience

• Positive Risks

Ambiguity risks describe the uncertainty that exists about what might happen in the future and are very difficult to predict, such as future regulations or changes in technology.

Multiple Choice

The project manager knows that managing risks is an important part of a project. One of the most important aspects is documenting the stakeholders’ risk appetite. Where would the project manager document the stakeholders’ risk appetite?

• In the stakeholder's engagement plan

• In the scope management plan

• In the risk management plan

• In the risk register

The stakeholders’ risk appetite is documented and stored in the risk management plan. The stakeholders’ risk appetite is an important component of the plan, since it will help determine what risks will be acceptable.

Multiple Choice

Senior management within the organization has requested a brief overview of how the project conducts risk management. They would like to see the different categories of risk that can affect the project. What should the project manager show them?

• the risk breakdown structure

• The work breakdown structure

• The resource breadown structure

• The risk register

The risk breakdown structure is part of the risk management plan, and it shows the different categories of risk on a project.

Multiple Choice

During the process of Identify risks, the project manager has determined that the project team should be included as stakeholders who identifies risks for the project. Which of the following statement is true about this approach?

• It will lead to a more thprpugh risk register

• It is incorrect and the project manager should have all stakeholders identify risks

• It would be easier to come up with the risk responses

• It would be easier to implement the risk responses

During the process of identify risks, all project stakeholders should be encouraged to help identify individual project risks. This will lead to a more thorough risk register and include perspectives from all people affected by the project.

Multiple Choice

The project team is currently doing data analysis to help identify which risks can affect the project. What data analysis technique can they use to help determine if there are certain risks in the procurement agreement that can affect the project?

• Root cause analysis

• Assumption and constrain analysis

• SWOT analysis

• Document analysis

Document analysis is a structured review of the different project documents that could include contracts, agreements, and different parts of the project plan.

Multiple Choice

The project team has started to identify risks on the project. What method can they best use to identify both positive and negative risks while analyzing how the strength may offset threats and vice versa?

• Root cause analysis

• Assumption and constrain analysis

• SWOT analysis

• Document analysis

The SWOT analysis is done to identify the strengths, weaknesses, opportunities, and threats of a project. This strengths and opportunities are positive risks, and the weaknesses and threats are the negative risks. By putting this into a quadrant diagram, the project team can see how strengths may offset threats, and vice versa.

Multiple Choice

The project team members have finished identifying risks up to this point in the project. They have created the risk register, which lists all of the individual project risks. What should the team create next?

• The risk management plan

• The risk response plan

• The risk report

• The risk implementation plan

The risk report is generally created with the risk register or after the risk register. It includes information on the sources of overall project risks and a summary of information on the identified individual project risks.

Multiple Choice

The project manager has met with the legal department within the organization to be informed of a new regulation that was recently passed that may impact the project. The project manager has added this risk to the risk register. What process should the project manager do next?

• Plan risk management

• Perform quantitative risk analysis

• Plan risk response

• Monitor risks

Once a risk has been identified, the next step is to determine how the risks will impact the project. This can be done by either doing a qualitative and/or a quantitative analysis. Sometimes, these two analyses are done sequentially, in which case a qualitative analysis is done followed by a quantitative analysis, or they can be done in parallel. Do not respond to a risk if you do not understand how the risk will impact the project.

Multiple Choice

The project team members are reviewing the risk in the risk register to determine which risks will have the greatest impact on a project. One risk in particular has a very high impact but the team has determined that this risk should be ranked very low on the project. What statement best describes why this risk is ranked so low?

• The probability of the risk occurring is low

• The project team is not familiar with the risk

• The risks will take place in the far future of the project

• They're using the wrong methods to assess the risks

It is very likely that some risks may have a high impact and a low probability, which will lead to the risk being ranked very low. An example is an earthquake in New York City. The impact may be high, but the probability of it occurring may be very low, which leads to the risk being ranked lower.

Multiple Choice

The project team members are currently doing the process of perform qualitative risk analysis. They would like to use a tool that could not only display the probability of the risks or impact but the overall likelihood of the risks. What tool can be used to display the three parameters?

• Probability and impact matrix

• Probability and impact assessment

• Bubble chart

• Ishikawa diagram

A bubble chart is part of the tool data representation. It is used to display three dimensions of data.

All other choices may only displays two dimensions.

Multiple Choice

While conducting a brainstorming session with the team in order to rank the risks, the project manager is worried about the data the team is using to rank the risks. The project manager feels that some team members may only be speculating about what the probability of a risks would be. What tool can best help the project manager in this scenario?

• Risk probability and impact assessment

• Risk data quality assessment

• Probability and impact matrix

• Hierarchical charts

Risk data quality assessment evaluates the degree to which the data about the individual risks are accurate and reliable. If these data are not accurate then the entire assessment may be compromise and will not truly reflect the risk ranking on a project.

Multiple Choice

The project manager and team has determined that if a flood were to take place during the building renovation project, it would delay the project by 2 weeks and cost approximately $50,000 in damages. What process did the project manager and team complete to collect these data?

• Perform qualitative risk analysis

• Perform quantitative risk analysis

• Identify risks

• Plan risk response

Quantitative risk analysis is a numerical analysis of how the risk will impact the project. This is in contrast to a qualitative analysis, which would just rank the risks from the most important to the least important. The project team did not come up with a response to the flood risks in this scenario, so the choice cannot be to plan a risk response. Identify risk is used to create the risk register, and a risk report does not evaluate the risks.

Multiple Choice

The project team has identified, ranked, and determined how the risks will impact the project. One risk in particular is a new regulation that may pass and can have a severe effect on the project and on the entire organization. What risk response strategy would be best for the team to take? 

• Avoid

• Tranfer

• Mitigate

• Escalate

Since this is a risk that will not just affect the project but the entire organization, the project team should escalate the risk toward a portfolio or the organization level. Let the organization’s legal department communicate with the project manager and determine how to respond.

Multiple Choice

The project team members are coming up with ways to respond to an opportunity that they feel will not likely happen. The opportunity is that the permit for the building renovation project comes earlier than its supposed six-week wait. Since the permit office is so backed up, the project team members have decided that if the permit does come earlier than 6 weeks, they will still start the work in 6 weeks. What risk response strategy does this illustrate?

• Escalate

• Exploit

• Enhance

• Accept

Acceptance of an opportunity is to take no proactive action before it happens. In this scenario, the team is making no proactive response. If the permit comes earlier, the team will still start the work in the 6 weeks that it would take for the permit to come normally.

Multiple Choice

While working on a 60-story skyscraper project, one supplier has informed the project manager that due to dangerous weather at the warehouse, the materials will be anywhere 1 to 2 months late. The project manager has already accounted for this risk and has decided to go with another supplier to get the materials. What process best illustrates this scenario?

• Plan risk response

• Monitor risks

• Implement risk responses

• Identify risks

In this scenario, the project manager is implementing the risk response. The project manager is not trying to identify risks or plan a response.

Multiple Choice

During the process of monitor risks, the project manager works with the organization to determine the effectiveness of the risk management processes. They have determined that the risk processes for the project are adequate and that no changes should be made. What tool best describes this?

• Audits

• Data Analysis

• Meetings

• Data Representation

Audits are done by the organization to determine the effectiveness of the risk management processes for a project.