Bootstrap Risk Assessment & Management 5

Question 1

A project's risk breakdown structure (RBS) is most useful for:

Accepted Answer

Organizing and categorizing identified risks by source or type

Answer

The RBS is a hierarchical framework that groups risks by category (technical, organizational, external, etc.) to ensure comprehensive coverage during identification.

Question 2

In a sensitivity analysis (tornado diagram), the risk variable at the top of the diagram indicates:

Accepted Answer

The risk with the greatest potential impact on the project objective

Answer

The tornado diagram sorts variables by their range of impact; the widest bar (top) represents the risk factor with the greatest influence on project outcome.

Question 3

Which scenario best illustrates a 'risk appetite' rather than a 'risk tolerance'?

Accepted Answer

The organization's strategic preference for pursuing high-reward, high-risk ventures

Answer

Risk appetite is a broad strategic posture toward risk-taking, while risk tolerance defines the specific thresholds of acceptable variation.

Question 4

When two risks have a correlation — meaning one risk occurring increases the likelihood of another — this is called:

Accepted Answer

Risk dependency

Answer

Risk dependency (or correlated risks) means the realization of one risk changes the probability or impact profile of another, requiring them to be assessed together.

Question 5

Under ISO 31000, the risk management process begins with which step?

Accepted Answer

Establishing the context

Answer

ISO 31000 mandates establishing the internal and external context (scope, objectives, stakeholders) before any risk identification or analysis begins.

Bootstrap Practice Test

Bootstrap Practice Test

Bootstrap Risk Assessment & Management 5