CSC Risk Management & Problem-Solving 2 — Questions and Answers
Question 1: A senior consultant discovers that a client's risk register has not been updated in six months during a project. What is the FIRST action to take?
- Close the project immediately
- Schedule an emergency risk review workshop with stakeholders (Correct answer)
- Escalate to the client's CEO
- Remove outdated risks without review
Correct answer: Schedule an emergency risk review workshop with stakeholders
Scheduling a risk review workshop ensures the register is collaboratively updated with current, accurate information from relevant stakeholders.
Question 2: Which quantitative risk analysis technique uses statistical simulation to model the probability of various project outcomes?
- SWOT analysis
- Monte Carlo simulation (Correct answer)
- Delphi technique
- Ishikawa diagram
Correct answer: Monte Carlo simulation
Monte Carlo simulation runs thousands of iterations using probability distributions to model the range of possible outcomes for cost and schedule.
Question 3: When applying the risk response strategy of 'transfer,' which of the following is the BEST example?
- Adding schedule contingency buffers
- Purchasing insurance or using a fixed-price contract (Correct answer)
- Eliminating the root cause of the risk
- Accepting the risk and doing nothing
Correct answer: Purchasing insurance or using a fixed-price contract
Transfer shifts the financial impact of a risk to a third party, most commonly through insurance or contractual arrangements like fixed-price contracts.
Question 4: A consultant is leading a root cause analysis after a major project failure. Which tool visually maps cause-and-effect relationships most effectively?
- Gantt chart
- Risk matrix
- Fishbone (Ishikawa) diagram (Correct answer)
- Work breakdown structure
Correct answer: Fishbone (Ishikawa) diagram
A fishbone diagram organizes potential causes into categories branching from the central problem, making root cause patterns visible.
Question 5: What does a risk's 'risk appetite' refer to in an organizational context?
- The total number of risks identified in the register
- The amount of risk an organization is willing to accept in pursuit of its objectives (Correct answer)
- The budget allocated for risk mitigation
- The frequency of risk review meetings
Correct answer: The amount of risk an organization is willing to accept in pursuit of its objectives
Risk appetite defines the level and type of risk an organization is prepared to accept while still pursuing strategic goals.
Question 6: During problem-solving, a senior consultant uses 'the 5 Whys' technique. What is the PRIMARY purpose of this approach?
- To assign blame to team members
- To drill down to the root cause of a problem through successive questioning (Correct answer)
- To document all possible solutions
- To prioritize risks by severity
Correct answer: To drill down to the root cause of a problem through successive questioning
The 5 Whys iteratively asks 'why' to peel back layers of symptoms until the fundamental root cause is uncovered.
Question 7: A project has a 30% probability of a $200,000 loss and a 70% probability of a $50,000 gain. What is the Expected Monetary Value (EMV)?
- -$25,000 (Correct answer)
- $25,000
- -$60,000
- $95,000
Correct answer: -$25,000
EMV = (0.30 × -$200,000) + (0.70 × $50,000) = -$60,000 + $35,000 = -$25,000.
CSC Risk Management & Problem-Solving 2
A senior consultant discovers that a client's risk register has not been updated in six months during a project.
What is the FIRST action to take?