Project Risk Management Project Risk Management MCQ 5 — Questions and Answers
Question 1: Which of the following is NOT a tool or technique used in the Identify Risks process?
- Brainstorming
- SWOT analysis
- Probability and impact matrix (Correct answer)
- Checklist analysis
Correct answer: Probability and impact matrix
The probability and impact matrix is used in Perform Qualitative Risk Analysis, not in Identify Risks.
Question 2: Management reserve differs from contingency reserve because it is:
- Smaller in size
- Set aside for unknown unknowns, not controlled by the project manager (Correct answer)
- Allocated per individual risk
- Used only after project closure
Correct answer: Set aside for unknown unknowns, not controlled by the project manager
Management reserve is held by senior management for unforeseen events (unknown unknowns) and requires executive approval to access.
Question 3: A sensitivity analysis is best described as a technique that:
- Simulates thousands of possible project outcomes
- Determines which risks have the most potential impact on project objectives (Correct answer)
- Assigns dollar values to all identified risks
- Identifies risk triggers across workstreams
Correct answer: Determines which risks have the most potential impact on project objectives
Sensitivity analysis identifies which individual risks or uncertainties have the greatest effect on project outcomes, often displayed as a tornado diagram.
Question 4: An organization consistently documents lessons learned related to risk management. This practice supports which principle?
- Risk avoidance across all projects
- Continuous improvement and organizational process asset updates (Correct answer)
- Transfer of risk to future projects
- Elimination of the risk register requirement
Correct answer: Continuous improvement and organizational process asset updates
Documenting lessons learned updates organizational process assets and improves risk management practices on future projects.
Question 5: A project is 60% complete when a previously unidentified risk surfaces. What should the project manager do first?
- Escalate to the sponsor immediately
- Add the risk to the risk register and analyze it (Correct answer)
- Issue a change request to extend the schedule
- Invoke the contingency reserve
Correct answer: Add the risk to the risk register and analyze it
Newly identified risks should first be documented in the risk register and analyzed before any response actions are taken.
Question 6: Which of the following scenarios best illustrates 'risk enhancement'?
- Buying insurance to cover a potential equipment failure
- Increasing marketing spend to improve the chance of a favorable regulatory ruling (Correct answer)
- Hiring a subcontractor to handle a risky module
- Delaying the project start to avoid a market downturn
Correct answer: Increasing marketing spend to improve the chance of a favorable regulatory ruling
Risk enhancement increases the probability or impact of a positive risk, such as investing more resources to improve the chance of a favorable outcome.
Question 7: When communicating risk status to stakeholders, a project manager should primarily focus on:
- All risks in the register regardless of priority
- Only risks that have already occurred
- High-priority risks and the effectiveness of current responses (Correct answer)
- Risks that are the responsibility of external vendors
Correct answer: High-priority risks and the effectiveness of current responses
Stakeholder communication should emphasize high-priority risks and whether response plans are working, keeping reporting concise and actionable.
Project Risk Management Project Risk Management MCQ 5
Which of the following is NOT a tool or technique used in the Identify Risks process?