PMP Risk Management 2 — Questions and Answers
Question 1: A project manager notices that a key supplier is experiencing financial difficulties. Which risk response strategy is MOST appropriate?
- Accept the risk and monitor the supplier
- Transfer the risk by requiring a performance bond (Correct answer)
- Avoid the risk by canceling the contract
- Exploit the risk to gain a competitive advantage
Correct answer: Transfer the risk by requiring a performance bond
Transferring risk through a performance bond shifts the financial consequence to the supplier or a third party if the supplier fails to deliver.
Question 2: During risk quantification, a project manager calculates that a risk has a 30% probability of occurring and would cost $50,000 if it does. What is the Expected Monetary Value (EMV)?
- $15,000 (Correct answer)
- $50,000
- $35,000
- $20,000
Correct answer: $15,000
EMV = Probability × Impact = 0.30 × $50,000 = $15,000.
Question 3: Which document serves as the primary input for the Identify Risks process?
- Risk register
- Project charter
- Stakeholder register
- Assumption log (Correct answer)
Correct answer: Assumption log
The assumption log is a key input to Identify Risks because undocumented or false assumptions are a major source of project risk.
Question 4: A risk that has occurred and become an actual problem is called a:
- Trigger
- Residual risk
- Issue (Correct answer)
- Secondary risk
Correct answer: Issue
When a risk event occurs and materializes, it becomes an issue that must be managed through the issue log.
Question 5: A project team implements a workaround. This means they are:
- Applying a planned contingency response
- Responding to a risk that has no pre-planned response (Correct answer)
- Updating the risk register with new risks
- Escalating the risk to the sponsor
Correct answer: Responding to a risk that has no pre-planned response
A workaround is an unplanned response developed to address a risk or issue that did not have a pre-planned contingency response.
Question 6: Which risk analysis technique uses optimistic, pessimistic, and most likely estimates to model schedule or cost uncertainty?
- Monte Carlo simulation
- Decision tree analysis
- Three-point estimating (PERT) (Correct answer)
- Sensitivity analysis
Correct answer: Three-point estimating (PERT)
Three-point estimating (PERT) uses optimistic, pessimistic, and most likely estimates to calculate a weighted average and model uncertainty.
Question 7: A newly identified risk arises late in the project execution phase. What is the FIRST action the project manager should take?
- Immediately escalate to the project sponsor
- Add it to the risk register and perform qualitative analysis (Correct answer)
- Implement a contingency plan
- Update the project management plan
Correct answer: Add it to the risk register and perform qualitative analysis
Any newly identified risk should first be documented in the risk register and then analyzed to determine its priority before taking further action.
PMP Risk Management 2
A project manager notices that a key supplier is experiencing financial difficulties.
Which risk response strategy is MOST appropriate?