Project Management Risk Response Planning 2 — Questions and Answers
Question 1: A project manager decides to purchase insurance to cover potential financial losses from a risk event. Which risk response strategy is being used?
- Avoid
- Mitigate
- Transfer (Correct answer)
- Accept
Correct answer: Transfer
Purchasing insurance transfers the financial consequence of a risk to a third party (the insurer).
Question 2: Which document serves as the primary input for developing risk responses in the Plan Risk Responses process?
- Risk management plan
- Risk register (Correct answer)
- Issue log
- Lessons learned register
Correct answer: Risk register
The risk register contains identified risks, their probability/impact ratings, and priority rankings that drive response planning.
Question 3: A project team chooses to use a more proven technology instead of a cutting-edge one to eliminate the chance of a technical failure risk. This is an example of:
- Mitigate
- Transfer
- Avoid (Correct answer)
- Escalate
Correct answer: Avoid
Changing the approach to eliminate the risk entirely is avoidance, the most aggressive threat response strategy.
Question 4: When a risk response is implemented, it may introduce new risks. These newly created risks are called:
- Residual risks
- Secondary risks (Correct answer)
- Trigger risks
- Emergent risks
Correct answer: Secondary risks
Secondary risks are risks that arise as a direct result of implementing a risk response.
Question 5: A project manager accepts a risk and sets aside $50,000 in the contingency reserve. This is an example of:
- Passive acceptance
- Active acceptance (Correct answer)
- Transfer
- Mitigate
Correct answer: Active acceptance
Active acceptance involves establishing a contingency reserve (time, money, or resources) to deal with the risk if it occurs.
Question 6: Which risk response strategy for opportunities is the BEST match for the threat response strategy of 'transfer'?
- Exploit
- Enhance
- Share (Correct answer)
- Accept
Correct answer: Share
Sharing an opportunity (e.g., forming a joint venture) is the opportunity equivalent of transferring a threat to a third party better able to capture it.
Question 7: A risk owner is assigned during the Plan Risk Responses process. What is the PRIMARY responsibility of a risk owner?
- Approving the risk management plan
- Monitoring the risk and implementing the agreed response (Correct answer)
- Funding the contingency reserve
- Updating the WBS for risk-related tasks
Correct answer: Monitoring the risk and implementing the agreed response
The risk owner is accountable for monitoring the assigned risk and executing the planned response if the risk occurs or its status changes.
Project Management Risk Response Planning 2
A project manager decides to purchase insurance to cover potential financial losses from a risk event.
Which risk response strategy is being used?