MEM Risk Management 1

Question 1

In risk management, how is 'risk' commonly defined?

Accepted Answer

The product of the probability of an event and its potential impact

Answer

Risk is typically quantified as the combination of the likelihood (probability) of an uncertain event occurring and its consequence (impact) if it does occur.

Question 2

What is the difference between a 'risk' and an 'issue' in project management?

Accepted Answer

A risk is a potential future event; an issue is a problem that has already occurred

Answer

A risk is an uncertain future event that may affect project objectives, while an issue is a risk that has materialized and requires immediate resolution.

Question 3

Which risk response strategy involves transferring the financial consequence of a risk to a third party?

Accepted Answer

Risk transfer

Answer

Risk transfer shifts the financial consequences of a risk to another party, typically through insurance, warranties, or contractual provisions like indemnification clauses.

Question 4

In a risk matrix, a risk rated as 'high probability' and 'high impact' falls into which category?

Accepted Answer

High priority risk requiring immediate attention

Answer

High-probability, high-impact risks sit in the upper-right quadrant of a risk matrix and require immediate, active mitigation or response planning.

Question 5

What is a 'risk register' in engineering project management?

Accepted Answer

A document that identifies, analyzes, and records responses to project risks

Answer

A risk register is a centralized document that captures identified risks, their probability, impact, ownership, and planned response strategies throughout the project.

MEM - Master of Engineering Management Practice Test

MEM - Master of Engineering Management Practice Test

MEM Risk Management 1