Basic Risk & Control

Which of the following options is not a possible strategy for dealing with opportunities that may have positive impacts on a project?

• Sharing

• Acceptance

• Enhancement

• Avoidance

Which of the following options is not a risk identification method?

• SWOT Analysis

• Brainstorming

• Probability Matrix

• Fishbone Diagram

How can you calculate the “Risk Value” of a specific project risk?

• Probability of Event x Cost of Event

• Probability of Event / Cost of Event

• Probability of Event + Cost of Event

• Probability of Event - Cost of Event

Which are the two dimensions of the “risk matrix”?

• Risk and Damage

• Loss and Benefit

• Probability and Impact

• Threats and Opportunities

Picture the “risk matrix” chart to yourself. Which risks are categorized in the top right corner?

• Low impact/low probability

• Low impact/high probability

• High impact/low probability

• High impact/high probability

What are the four possible strategies for dealing with risks that may have negative impacts on a project?

• Avoidance, Transference, Mitigation, and Deviation

• Avoidance, Mitigation, Acceptance, and Transference

• Exploitation, Sharing, Enhancement, and Acceptance

• Exploitation, Sharing, Enhancement, and Deviation

Which of the following methods of risk management involves derivative products where a company pays a premium to a party to accept a certain level of risk?

• Avoiding the risk.

• Accept the risk.

• Transferring the risk.

• Mitigating the risk.

What is the key difference between Risk Appetite and Risk Capacity?

• Risk Appetite is the total amount of risk a firm is willing to accept, while Risk Capacity is the maximum amount of risk the firm can absorb.

• Risk Appetite refers to the maximum potential risk, while Risk Capacity is the amount of risk a firm is currently exposed to.

• Risk Capacity defines the level of risk a firm is happy to bear at any one time, while Risk Appetite is the maximum amount of risk the firm could bear without becoming insolvent.

• Risk Appetite is set based on market conditions, while Risk Capacity is determined by the firm’s internal policies.

In the context of treating risks, which of the following is an example of risk mitigation?

• Deciding not to proceed with a risky project to avoid the risk.

• Contracting with a third-party company to take on the risk.

• Taking steps to reduce the likelihood or impact of the risk, such as conducting market research before launching a product.

• Accepting the risk and proceeding with the project as planned.

Which of the following best describes the role of Risk Registers in risk management?

• They are used to track all risks a firm has encountered in the past.

• They contain potential risks, their probability, impact, and mitigation strategies and are updated throughout the project lifecycle.

• They are fixed lists of risks created at the start of the project and are rarely updated.

• They provide a framework for determining which risks should be completely eliminated.