PCC Risk Assessment & Mitigation 2

Question 1

Which risk response strategy involves shifting the negative impact of a risk to a third party?

Accepted Answer

Transfer

Answer

Risk transfer moves the financial or operational consequence to another party, such as through insurance or fixed-price contracts.

Question 2

A project team identifies a risk with a 40% probability and a $500,000 impact. What is the risk's Expected Monetary Value (EMV)?

Accepted Answer

$200,000

Answer

EMV is calculated by multiplying probability (0.40) by impact ($500,000), yielding $200,000.

Question 3

What is the primary purpose of a risk register in project controls?

Accepted Answer

Document identified risks and response plans

Answer

A risk register is the central repository for all identified risks, their assessments, owners, and planned responses.

Question 4

In a tornado diagram, what does the length of each bar represent?

Accepted Answer

The range of impact a variable has on the project outcome

Answer

Each bar in a tornado diagram shows the swing — the difference between the high and low outcomes — for each risk variable.

Question 5

Which type of risk cannot be eliminated through diversification because it affects the entire market or industry?

Accepted Answer

Systematic risk

Answer

Systematic risk (also called non-diversifiable risk) arises from macroeconomic factors and affects all projects in a market.

(PCC) Project Controls Certification Practice Test