PMP SET 1.9.Risk

1. Workarounds are executed during which step of risk management?

• A. Risk identification
• B. Risk analysis
• C. Risk response planning
• D. Risk control

2. You have assumed responsibility for a complex, business-critical project involving new technology and approaches. All of the project's stakeholders have emphasized to you that this is a high-risk effort, and that you are responsible for effectively identifying and addressing the project's risks. There are a number of risk management tools and approaches you have been encouraged to use, but there is no agreement from the stakeholders as to which is the superior approach. The organization sponsoring the project has recommended risk management methodologies and templates, but does not consistently or effectively use them. In addressing risk management planning for this project, what is the MOST important consideration you should keep in mind?

• A. Ensure all risks have been identified and mitigation strategies have been developed for the most important ones
• B. Complete at least a moderately thorough examination of available risk management tools and methodologies to select the best ones for the project
• C. Create a high quality risk management plan and risk response plan
• D. Tailor the level, type, and visibility of risk management to match the risks associated with the project and the project's importance

3. One of the risks your team has discovered is a high probability that the equipment you are developing will not perform under the pressure it needs to in the workplace. In order to handle this risk, you have chosen to prototype the equipment. This is an example of risk:

• A. Mitigation
• B. Avoidance
• C. Transference
• D. Acceptance

4. During risk control, the risk response owner should be:

• A. Identifying which risks he/she wants to monitor.
• B. Controlling the identification of response strategies.
• C. Informing the project manager of any midcourse correction needed.
• D. Updating stakeholders of new strategies for mitigating risks.

5. You are a project manager for a major computer network upgrade with a NPV of $10,000,000 over a four-year useful life. You are heavily dependent on a third party vendor for your project and your procurement officer informs you that there is a 20% chance that the vendor will go out of business at the end of the quarter. If that occurs, your project will incur a $1,500,000 cost overrun due to rework. There is also a 40% chance that the government will increase the subsidy for the project. If the government subsidy passes, you estimate that your project will save $1,600,000. Lastly, your technical project member indicates that there is 20% chance that a new software-testing package will be available by next month that could save $1,000,000 in testing time. If available, the software will cost $500,000 to procure, install and train. What is the total Expected Monetary Value (EMV) of these risks in the project?

• A. $440,000
• B. -$40,000
• C. $840,000
• D. $1,240,000

6. What would be the worst-case scenario for the above project?

• A. $2,000,000
• B. $1,360,000
• C. -$1,500,000
• D. -$2,600,000

7. What is the total expected monetary value of these risks in the project if the new software-testing package is already available and purchased, and has a 20% chance that could save $1,000,000 in testing time?

• A. $540,000
• B. -$40,000
• C. $840,000
• D. $1,240,000

8. During risk identification, a project manager has made a long list of risks identified by all the stakeholders using various methods. He then made sure that all the risks were understood. Later, in risk response planning, he took all the risks identified by the stakeholders, identify the triggers, and determined ways to mitigate risks. What has he done wrong?

• A. The project manager should have waited until qualitative risk analysis to get the stakeholders involved.
• B. More people should be involved in risk response planning.
• C. The project manager should have created workaround.
• D. Triggers are identified during risk identification.

9. You are a project manager for a major new manufacturing plant that has never been done before. The project cost is estimated at $30,000,000 and will make use of three sellers. Once begun, the project cannot be canceled, as there will be a large expenditure on plant and equipment. As the project manager, it would be most important to carefully:

• A. Review all cost proposals from the sellers.
• B. Examine the budget reserves.
• C. Complete the project charter.
• D. Perform an identification of risks.

10. The risk ranking of the project is an input to which part of the risk management process?

• A. Risk identification
• B. Risk management planning
• C. Risk analysis
• D. Risk response planning