GCP Risk Assessment & Management 2 — Questions and Answers
Question 1: A project manager identifies that a key vendor may go out of business before delivering critical software. What type of risk response is BEST suited for this scenario?
- Accept the risk and document it
- Transfer the risk to the vendor via contract penalties
- Mitigate by qualifying an alternative vendor (Correct answer)
- Avoid the risk by canceling the project
Correct answer: Mitigate by qualifying an alternative vendor
Mitigation reduces probability or impact; qualifying an alternate vendor reduces the impact if the primary vendor fails.
Question 2: During qualitative risk analysis, a risk is rated High probability and High impact. What should the project manager do NEXT?
- Close the risk immediately
- Prioritize it for quantitative analysis and response planning (Correct answer)
- Accept the risk and move on
- Escalate to the project sponsor without further analysis
Correct answer: Prioritize it for quantitative analysis and response planning
High-probability, high-impact risks should be prioritized for deeper quantitative analysis and proactive response planning.
Question 3: Which tool produces a numerical estimate of the overall project risk by simulating thousands of possible schedule or cost outcomes?
- Risk register
- Monte Carlo simulation (Correct answer)
- Probability and impact matrix
- SWOT analysis
Correct answer: Monte Carlo simulation
Monte Carlo simulation runs thousands of iterations to produce probability distributions for schedule and cost outcomes.
Question 4: A risk owner has been assigned to a specific risk. What is the PRIMARY responsibility of a risk owner?
- Approve the project budget
- Implement and monitor the agreed risk response (Correct answer)
- Conduct the qualitative risk analysis
- Update the project charter
Correct answer: Implement and monitor the agreed risk response
The risk owner is accountable for executing and monitoring the risk response plan for their assigned risk.
Question 5: What is the difference between a 'risk' and an 'issue' in project management?
- A risk has already occurred; an issue has not yet occurred
- An issue has already occurred; a risk is a potential future event (Correct answer)
- They are interchangeable terms
- A risk is always negative; an issue can be positive or negative
Correct answer: An issue has already occurred; a risk is a potential future event
A risk is an uncertain future event, while an issue is a problem that has already materialized and requires immediate action.
Question 6: Which risk response strategy is MOST appropriate for a positive risk (opportunity)?
- Avoid
- Transfer
- Exploit (Correct answer)
- Mitigate
Correct answer: Exploit
Exploit is used for opportunities to ensure they definitely occur, such as assigning best resources to guarantee a beneficial outcome.
Question 7: A project team creates contingency reserves. What is the PRIMARY purpose of these reserves?
- To fund management's discretionary spending
- To cover known-unknown risks identified in the risk register (Correct answer)
- To cover unknown-unknown risks
- To offset scope changes approved by the change control board
Correct answer: To cover known-unknown risks identified in the risk register
Contingency reserves are allocated to address identified (known-unknown) risks if their triggers occur.
GCP Risk Assessment & Management 2
A project manager identifies that a key vendor may go out of business before delivering critical software.
What type of risk response is BEST suited for this scenario?