PMBOK Risk Management Processes 4 — Questions and Answers
Question 1: What is the Expected Monetary Value (EMV) of a risk with a 30% probability and a $50,000 negative impact?
- -$15,000 (Correct answer)
- -$35,000
- $15,000
- -$150,000
Correct answer: -$15,000
EMV = Probability × Impact = 0.30 × (-$50,000) = -$15,000, representing the weighted average outcome.
Question 2: Which risk process uses the probability and impact matrix as a key tool?
- Plan Risk Management
- Identify Risks
- Perform Qualitative Risk Analysis (Correct answer)
- Perform Quantitative Risk Analysis
Correct answer: Perform Qualitative Risk Analysis
Perform Qualitative Risk Analysis uses the probability and impact matrix to categorize risks as high, medium, or low priority.
Question 3: A project manager is using a decision tree to evaluate two alternative courses of action based on risk probabilities. This technique belongs to which process?
- Identify Risks
- Perform Qualitative Risk Analysis
- Plan Risk Responses
- Perform Quantitative Risk Analysis (Correct answer)
Correct answer: Perform Quantitative Risk Analysis
Decision tree analysis is a quantitative technique used in Perform Quantitative Risk Analysis to compare options under uncertainty.
Question 4: Which risk response strategy involves partnering with another organization to share both the opportunity and the resources needed to pursue it?
- Exploit
- Enhance
- Share (Correct answer)
- Accept
Correct answer: Share
Share allocates ownership of an opportunity to a third party who is best able to capture it, such as through a joint venture.
Question 5: The Risk Report, added in PMBOK 6th edition, differs from the Risk Register in that it primarily provides:
- A list of individual project risks
- Information on overall project risk exposure (Correct answer)
- Detailed risk response plans
- Risk trigger conditions
Correct answer: Information on overall project risk exposure
The Risk Report presents information on overall project risk exposure, including a summary of individual risk findings.
Question 6: A contingency reserve is set aside to address which type of risk?
- Unknown unknowns
- Known unknowns (Correct answer)
- Black swan events
- Management reserves cover these
Correct answer: Known unknowns
Contingency reserves address known unknowns—identified risks with response plans that may still materialize.
Question 7: Which data representation technique in risk management plots risks on a two-dimensional grid showing probability on one axis and impact on the other?
- Tornado diagram
- Probability and impact matrix (Correct answer)
- Risk breakdown structure
- Hierarchical chart
Correct answer: Probability and impact matrix
The probability and impact matrix maps risks based on their likelihood of occurring and the magnitude of their effect on project objectives.
PMBOK Risk Management Processes 4
What is the Expected Monetary Value (EMV) of a risk with a 30% probability and a $50,000 negative impact?