Risk Management Flashcards
7 cards from real CAPM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Risk Management flashcards as text
A risk with a 30% probability and a $50,000 impact has an expected monetary value (EMV) of:
Answer: $15,000
EMV is calculated by multiplying probability by impact: 0.30 × $50,000 = $15,000.
Which of the following tools is used to visually display the cumulative probability distribution of project outcomes?
Answer: S-curve
An S-curve displays the cumulative probability that project cost or schedule will not exceed a given value.
The amount of risk an organization is willing to accept in pursuit of an objective is known as:
Answer: Risk appetite
Risk appetite is the broad-level amount of risk an organization is willing to accept while pursuing its strategic objectives.
A project team decides to add extra time to the schedule to account for identified risks. This reserve is called:
Answer: Contingency reserve
Contingency reserve is budget allocated for known risks (known unknowns) and is included within the cost baseline.
Which diagramming technique shows the relationship between a risk and its causes and effects?
Answer: Influence diagram
Influence diagrams graphically represent cause-and-effect relationships among variables including risks and their impacts.
When a project team decides to proceed with a project activity knowing a risk exists but chooses not to act on it, this is called:
Answer: Passive acceptance
Passive acceptance means acknowledging a risk without proactive action, allowing the team to deal with it if it occurs.
A tornado diagram is used in quantitative risk analysis to show:
Answer: The sensitivity of project outcomes to individual risks
A tornado diagram ranks risks by their impact on the project objective, with the highest-impact risk at the top.