Bootstrap Risk Assessment & Management 2 — Questions and Answers
Question 1: Which risk matrix dimension measures the potential severity of a risk if it occurs?
- Likelihood
- Impact (Correct answer)
- Velocity
- Detectability
Correct answer: Impact
Impact measures how severely a risk event would affect project objectives, cost, schedule, or scope if it materializes.
Question 2: A project manager identifies a risk that has a 40% probability and a $50,000 impact. What is the risk's Expected Monetary Value (EMV)?
- $20,000 (Correct answer)
- $50,000
- $12,500
- $90,000
Correct answer: $20,000
EMV = Probability × Impact = 0.40 × $50,000 = $20,000, representing the statistically expected cost of the risk.
Question 3: What does a 'risk trigger' represent in risk management?
- The root cause of a risk
- A warning sign that a risk is about to occur (Correct answer)
- The cost of a risk response
- A risk that causes other risks
Correct answer: A warning sign that a risk is about to occur
A risk trigger is an early warning indicator or symptom that signals a risk event is imminent or has occurred.
Question 4: Which risk response strategy involves sharing risk with a third party through insurance or contracts?
- Avoid
- Accept
- Transfer (Correct answer)
- Mitigate
Correct answer: Transfer
Transfer shifts the financial or operational consequence of a risk to another party, such as an insurer or contractor.
Question 5: In qualitative risk analysis, risks are typically ranked using which tool?
- Monte Carlo simulation
- Decision tree analysis
- Probability and impact matrix (Correct answer)
- Earned value analysis
Correct answer: Probability and impact matrix
The probability and impact matrix plots risks by likelihood and potential impact to prioritize which ones require immediate attention.
Question 6: What is 'residual risk' in the context of risk management?
- Risk identified after project completion
- Risk remaining after response strategies have been applied (Correct answer)
- Risk that is too small to document
- Risk transferred to another party
Correct answer: Risk remaining after response strategies have been applied
Residual risk is the exposure that remains after risk responses have been implemented — not all risk can be fully eliminated.
Question 7: Which document serves as the primary repository for all identified project risks, their assessments, and planned responses?
- Project charter
- Risk register (Correct answer)
- Lessons learned log
- Issue log
Correct answer: Risk register
The risk register is the centralized record that captures each risk, its probability, impact, owner, triggers, and response plans.
Bootstrap Risk Assessment & Management 2
Which risk matrix dimension measures the potential severity of a risk if it occurs?