Project Management Risk Management and Mitigation 2 — Questions and Answers
Question 1: A project manager discovers a risk that was not captured in the initial risk register. What is the FIRST action to take?
- Immediately escalate to the project sponsor
- Document the risk in the risk register and assess it (Correct answer)
- Implement a workaround to address it
- Close the risk if it has not yet occurred
Correct answer: Document the risk in the risk register and assess it
Newly identified risks should be documented in the risk register and then assessed for probability and impact before any response is planned.
Question 2: Which risk response strategy is being used when a project team decides to outsource a high-risk component to a specialized vendor?
- Avoid
- Accept
- Transfer (Correct answer)
- Mitigate
Correct answer: Transfer
Transferring risk shifts the financial impact or responsibility of a risk to a third party, such as a vendor or insurer.
Question 3: What does the term 'risk appetite' refer to in project management?
- The number of risks a project can have before it is cancelled
- The amount of risk an organization is willing to accept in pursuit of its objectives (Correct answer)
- The total monetary value of all identified risks
- The frequency at which risk reviews are conducted
Correct answer: The amount of risk an organization is willing to accept in pursuit of its objectives
Risk appetite is the degree of uncertainty an organization or stakeholder is willing to accept in anticipation of a reward.
Question 4: During a risk review, a previously identified risk has its probability reduced from 'High' to 'Low' after a mitigation action was completed. What should the PM do?
- Remove the risk from the register immediately
- Update the risk register to reflect the new probability and impact scores (Correct answer)
- Escalate the change to the change control board
- Archive the risk and create a new entry
Correct answer: Update the risk register to reflect the new probability and impact scores
The risk register is a living document and should be updated whenever risk attributes change due to mitigation actions or new information.
Question 5: A project manager notices that the cost of mitigating a risk exceeds the expected monetary value (EMV) of the risk itself. What is the BEST course of action?
- Implement the mitigation anyway to follow best practices
- Accept the risk passively and plan a contingency response (Correct answer)
- Transfer the risk to a third party at any cost
- Avoid the risk by cancelling the associated work package
Correct answer: Accept the risk passively and plan a contingency response
When mitigation costs outweigh the EMV of the risk, passive acceptance with a contingency plan is the most cost-effective response.
Question 6: Which of the following BEST describes a secondary risk?
- A risk that occurs after project closure
- A risk that arises as a direct result of implementing a risk response (Correct answer)
- A risk inherited from another project
- A risk that has a secondary owner assigned
Correct answer: A risk that arises as a direct result of implementing a risk response
Secondary risks are new risks that emerge as a consequence of a planned risk response action.
Question 7: In qualitative risk analysis, a 'probability and impact matrix' is used to:
- Calculate the exact financial exposure of each risk
- Prioritize risks for further analysis or risk response planning (Correct answer)
- Assign risk owners to each identified risk
- Determine which risks require insurance coverage
Correct answer: Prioritize risks for further analysis or risk response planning
The probability and impact matrix helps teams prioritize risks by rating their likelihood and potential effect, guiding where to focus risk management efforts.
Project Management Risk Management and Mitigation 2
A project manager discovers a risk that was not captured in the initial risk register.
What is the FIRST action to take?