Risk Management and Contingency Planning Flashcards

A risk that has been identified but for which no active response plan is developed is said to be:

Answer: Accepted passively

Passive acceptance means acknowledging the risk exists but taking no preemptive action, relying on contingency reserves if it occurs.

In risk analysis, 'residual risk' refers to:

Answer: The remaining risk exposure after response strategies have been applied

Residual risk is the leftover exposure that remains after mitigation or other response measures have been implemented.

Which AACE International recommended practice provides guidance on cost estimate classification and contingency ranges?

Answer: RP 18R-97

AACE RP 18R-97 establishes the cost estimate classification system linking estimate class to expected accuracy and contingency ranges.

A project team decides to reduce scope to eliminate a high-probability, high-impact risk. This is an example of:

Answer: Risk avoidance

Risk avoidance involves changing the plan to eliminate the risk entirely, often by removing the risky scope element.

What is 'secondary risk' in the context of project risk management?

Answer: A new risk introduced by a risk response action

Secondary risks arise as a direct result of implementing a risk response and must themselves be planned for.

In a risk probability-impact matrix, a risk rated 'High' probability and 'High' impact would typically require:

Answer: Aggressive response planning and active monitoring

High-probability, high-impact risks demand proactive response strategies and continuous close monitoring.

Which of the following best describes 'known unknowns' in project estimating?

Answer: Identified risks whose outcomes are uncertain

Known unknowns are risks you have identified and acknowledged but whose specific outcomes or timing remain uncertain.