MR Risk Assessment and Management 1 — Questions and Answers
Question 1: What is the first step in the risk management process?
- Risk identification — recognizing potential threats and opportunities (Correct answer)
- Risk transfer through insurance
- Risk avoidance by stopping all activities
- Risk acceptance without analysis
Correct answer: Risk identification — recognizing potential threats and opportunities
Risk identification is the foundation of risk management, involving systematic recognition of potential threats and opportunities.
Question 2: How is risk typically measured?
- By the probability of occurrence multiplied by the potential impact (Correct answer)
- By the number of stakeholders affected only
- By the cost of insurance premiums
- By the opinion of the most senior manager
Correct answer: By the probability of occurrence multiplied by the potential impact
Risk is commonly quantified as probability times impact, helping prioritize which risks need the most attention.
Question 3: What is risk mitigation?
- Taking actions to reduce the probability or impact of identified risks (Correct answer)
- Ignoring risks that seem unlikely
- Transferring all risks to insurance companies
- Eliminating all project activities that involve any risk
Correct answer: Taking actions to reduce the probability or impact of identified risks
Risk mitigation involves implementing strategies to reduce either the likelihood of a risk occurring or its potential impact.
Question 4: What is the purpose of a risk register?
- To document identified risks, their analysis, and planned responses (Correct answer)
- To list all project team members and their roles
- To record only financial risks
- To track daily activities
Correct answer: To document identified risks, their analysis, and planned responses
A risk register is a living document that captures all identified risks, their assessment, ownership, and response strategies.
Question 5: When should risk assessment be performed during a project?
- Throughout the entire project lifecycle, not just at the beginning (Correct answer)
- Only during the planning phase
- Only after a risk event occurs
- Only at project completion for lessons learned
Correct answer: Throughout the entire project lifecycle, not just at the beginning
Risk assessment should be ongoing throughout the project as new risks can emerge at any stage and existing risks can change.
Question 6: What is the difference between risk avoidance and risk acceptance?
- Avoidance eliminates the risk entirely; acceptance acknowledges it without active response (Correct answer)
- They are the same concept
- Avoidance is always preferred to acceptance
- Acceptance means the risk is transferred to another party
Correct answer: Avoidance eliminates the risk entirely; acceptance acknowledges it without active response
Risk avoidance changes plans to eliminate the risk, while risk acceptance consciously decides to proceed despite the risk.
MR Risk Assessment and Management 1
What is the first step in the risk management process?