PMBOK Managing Project Risks 2 — Questions and Answers
Question 1: Which risk response strategy involves shifting the negative impact of a risk to a third party?
- Avoid
- Transfer (Correct answer)
- Mitigate
- Accept
Correct answer: Transfer
Transfer shifts risk ownership and financial impact to another party, such as through insurance or subcontracting.
Question 2: A project manager discovers a new risk after the risk register has been finalized. What is the BEST next step?
- Ignore it since the register is closed
- Add it to the risk register and analyze it (Correct answer)
- Escalate it directly to the sponsor without analysis
- Apply the contingency reserve immediately
Correct answer: Add it to the risk register and analyze it
Risks can be identified at any project phase; newly discovered risks must be added to the risk register and analyzed.
Question 3: What is the purpose of a risk audit in project management?
- To identify new project risks
- To evaluate the effectiveness of risk responses (Correct answer)
- To calculate the expected monetary value of risks
- To prioritize risks using a probability-impact matrix
Correct answer: To evaluate the effectiveness of risk responses
Risk audits examine and document the effectiveness of risk responses and the risk management process itself.
Question 4: A project team uses a decision tree to evaluate two options. Option A has a 60% chance of a $200K gain and 40% chance of a $50K loss. Option B has a guaranteed $80K gain. Which option has a higher Expected Monetary Value (EMV)?
- Option A with EMV of $100K
- Option B with EMV of $80K
- Option A with EMV of $100K, making it preferable (Correct answer)
- Both have equal EMV
Correct answer: Option A with EMV of $100K, making it preferable
Option A EMV = (0.6 × $200K) + (0.4 × -$50K) = $120K - $20K = $100K, which exceeds Option B's $80K.
Question 5: Which document lists all identified risks, their root causes, potential responses, and owners?
- Risk Management Plan
- Risk Register (Correct answer)
- Issue Log
- Assumption Log
Correct answer: Risk Register
The risk register is the primary artifact for capturing identified risks, analysis results, response plans, and ownership.
Question 6: Residual risks are BEST described as:
- Risks that have been fully eliminated
- Risks remaining after risk responses have been implemented (Correct answer)
- Risks that are transferred to a third party
- Secondary risks created by a risk response
Correct answer: Risks remaining after risk responses have been implemented
Residual risks are those that remain after planned risk responses have been applied and are still monitored.
Question 7: During project execution, a previously low-priority risk escalates in probability. What should the project manager do FIRST?
- Update the risk register and re-analyze the risk (Correct answer)
- Immediately invoke the contingency plan
- Submit a change request to cancel the risk
- Inform the customer and wait for guidance
Correct answer: Update the risk register and re-analyze the risk
The first step is to reassess and update the risk register to reflect the new probability before deciding on a response.
PMBOK Managing Project Risks 2
Which risk response strategy involves shifting the negative impact of a risk to a third party?