Project Risk Management Project Risk Management MCQ 3 — Questions and Answers
Question 1: In the context of project risk, what is a 'trigger'?
- A risk that causes budget overruns
- An indicator that a risk event is about to occur (Correct answer)
- The root cause of all project risks
- A mandatory escalation point
Correct answer: An indicator that a risk event is about to occur
A trigger (also called a risk symptom or warning sign) is an indicator that a risk event has occurred or is about to occur.
Question 2: Monte Carlo simulation is primarily used in which risk management process?
- Plan Risk Management
- Identify Risks
- Perform Quantitative Risk Analysis (Correct answer)
- Implement Risk Responses
Correct answer: Perform Quantitative Risk Analysis
Monte Carlo simulation is a quantitative technique used to model the probability of different outcomes numerically.
Question 3: A project manager accepts a risk without taking any proactive action. This strategy is called:
- Passive acceptance (Correct answer)
- Active acceptance
- Risk avoidance
- Risk enhancement
Correct answer: Passive acceptance
Passive acceptance means acknowledging the risk and dealing with it only if it occurs, without preparing a contingency plan.
Question 4: What is the primary output of the Identify Risks process?
- Risk management plan
- Risk register (Correct answer)
- Risk report
- Issue log
Correct answer: Risk register
The risk register is the key output of Identify Risks and documents all identified risks along with their characteristics.
Question 5: Which stakeholder is typically assigned as the risk owner?
- The project sponsor
- The person best positioned to monitor and implement risk responses (Correct answer)
- The project manager by default
- An external auditor
Correct answer: The person best positioned to monitor and implement risk responses
A risk owner is the person with the most knowledge or authority to monitor the risk and implement the assigned response.
Question 6: A team decides to eliminate a risk by changing the project scope to avoid the risky component. This is:
- Risk mitigation
- Risk avoidance (Correct answer)
- Risk transfer
- Risk acceptance
Correct answer: Risk avoidance
Risk avoidance eliminates the threat entirely, often by changing the project plan so the risk can no longer occur.
Question 7: Which of the following best describes 'risk appetite'?
- The maximum loss a project can sustain
- The degree of uncertainty an organization is willing to accept (Correct answer)
- The number of risks identified in a project
- The budget allocated for risk responses
Correct answer: The degree of uncertainty an organization is willing to accept
Risk appetite is the level of risk an organization is willing to pursue or retain in pursuit of its objectives.
Project Risk Management Project Risk Management MCQ 3
In the context of project risk, what is a 'trigger'?