Bootstrap Risk Assessment & Management 2

Question 1

Which risk matrix dimension measures the potential severity of a risk if it occurs?

Accepted Answer

Impact

Answer

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)?

Accepted Answer

$20,000

Answer

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?

Accepted Answer

A warning sign that a risk is about to occur

Answer

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?

Accepted Answer

Transfer

Answer

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?

Accepted Answer

Probability and impact matrix

Answer

The probability and impact matrix plots risks by likelihood and potential impact to prioritize which ones require immediate attention.

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