Project Risk Management Project Risk Management 2 — Questions and Answers
Question 1: Which risk response strategy involves shifting the negative impact of a risk to a third party?
- Avoid
- Mitigate
- Transfer (Correct answer)
- Accept
Correct answer: Transfer
Transfer moves the financial or operational burden of a risk to another party, such as through insurance or contracts.
Question 2: A project manager documents risks that are below the threshold for active response. This is called:
- Risk mitigation
- Passive acceptance (Correct answer)
- Risk avoidance
- Contingency planning
Correct answer: Passive acceptance
Passive acceptance means acknowledging a risk exists but choosing not to act unless it occurs.
Question 3: What is the PRIMARY purpose of a risk register?
- Track project costs
- Document identified risks and response plans (Correct answer)
- List project stakeholders
- Record lessons learned
Correct answer: Document identified risks and response plans
The risk register is the central repository for all identified risks, their analysis, and planned responses.
Question 4: During project execution, a risk that was not previously identified occurs. This is called a:
- Residual risk
- Secondary risk
- Unknown risk (Correct answer)
- Workaround trigger
Correct answer: Unknown risk
Unknown risks (unknown unknowns) are risks that were not foreseen during planning and cannot be managed proactively.
Question 5: Which qualitative risk analysis technique maps risks based on probability and impact?
- Monte Carlo simulation
- Probability and Impact Matrix (Correct answer)
- Expected Monetary Value
- Sensitivity analysis
Correct answer: Probability and Impact Matrix
The Probability and Impact Matrix categorizes risks as low, medium, or high based on their likelihood and potential effect.
Question 6: A project team allocates budget to cover the cost of accepted risks if they occur. This budget is called:
- Management reserve
- Project budget
- Contingency reserve (Correct answer)
- Risk tolerance
Correct answer: Contingency reserve
Contingency reserve is set aside to address known risks (known unknowns) that may occur during the project.
Question 7: Which process involves tracking identified risks, monitoring residual risks, and evaluating risk process effectiveness?
- Identify Risks
- Plan Risk Responses
- Monitor Risks (Correct answer)
- Perform Qualitative Risk Analysis
Correct answer: Monitor Risks
Monitor Risks is the process that tracks and evaluates risk throughout project execution to ensure responses are effective.
Project Risk Management Project Risk Management 2
Which risk response strategy involves shifting the negative impact of a risk to a third party?