MEM Risk Management

Question 1

In risk management, how is 'risk' commonly defined?

Accepted Answer

The product of the probability of an event and its potential impact

Answer

Any negative event that has already occurred

Answer

The total cost of insurance premiums for a project

Answer

Any deviation from the original project schedule

Question 2

What is the difference between a 'risk' and an 'issue' in project management?

Accepted Answer

A risk is a potential future event; an issue is a problem that has already occurred

Answer

Risks are always financial; issues are always technical

Answer

Issues are minor problems; risks are major threats only

Answer

They are synonymous terms used interchangeably

Question 3

Which risk response strategy involves transferring the financial consequence of a risk to a third party?

Accepted Answer

Risk transfer

Answer

Risk avoidance

Answer

Risk mitigation

Answer

Risk acceptance

Question 4

In a risk matrix, a risk rated as 'high probability' and 'high impact' falls into which category?

Accepted Answer

High priority risk requiring immediate attention

Answer

Low priority risk

Answer

Medium priority risk

Answer

Acceptable risk to be monitored passively

Question 5

What is a 'risk register' in engineering project management?

Accepted Answer

A document that identifies, analyzes, and records responses to project risks

Answer

A log of financial risks approved by the CFO

Answer

A list of all project stakeholders and their risk tolerance

Answer

A regulatory filing required for engineering projects

Question 6

What does 'risk appetite' refer to in organizational risk management?

Accepted Answer

The level of risk an organization is willing to accept in pursuit of its objectives

Answer

The amount an organization spends on risk management activities

Answer

The speed at which risks are identified and responded to

Answer

The organization's preference for risk transfer over mitigation