Managing Project Risks Flashcards

A project manager is leading a software development project. To address the risk of a critical server failing, the team implements a redundant server that will take over automatically. However, this response introduces a new risk: the failover process itself could corrupt data. According to the PMBOK® Guide, what is this new risk called?

Answer: Secondary risk

A secondary risk is a new risk that arises as a direct result of implementing a risk response. In this scenario, the primary risk was server failure, and the response was to add a redundant server. The new risk of data corruption during failover is a direct consequence of that response, making it a secondary risk.

During a project's Perform Qualitative Risk Analysis process, the team assesses identified risks to evaluate their probability of occurrence and potential impact on project objectives. What is the primary output of this process that helps in prioritizing risks for further action?

Answer: A list of risks for quantitative analysis and a risk watchlist

Perform Qualitative Risk Analysis prioritizes identified individual project risks for subsequent analysis or action by assessing their probability of occurrence and impact. The key outputs are a prioritized list of risks, which often includes those that will undergo quantitative analysis, and a watchlist for low-priority risks that will be monitored.

A construction project faces a high-impact risk of encountering contaminated soil, which would cause significant budget overruns and schedule delays. The project manager decides to hire a specialized environmental firm that will assume all financial and legal responsibility for soil remediation if contamination is found. Which risk response strategy is being used?

Answer: Transfer

The Transfer strategy involves shifting the negative impact of a threat, along with ownership of the response, to a third party. By hiring a specialized firm to take on the financial and legal responsibilities, the project is transferring the consequences of the risk.

A project manager is performing a quantitative risk analysis to determine the project's exposure to overall risk. They use a technique that multiplies the probability of each risk occurring by its potential financial impact to calculate an average outcome. What is this technique called?

Answer: Expected Monetary Value (EMV) Analysis

Expected Monetary Value (EMV) analysis is a statistical technique that calculates the average outcome when the future includes scenarios that may or may not happen. The formula is EMV = Probability × Impact. It is used to quantify the potential financial impact of risks and is a key tool in quantitative risk analysis.

Which of the following documents provides a high-level summary of overall project risk, sources of risk, and trends for senior management and key stakeholders, as opposed to a detailed list of individual risks?

Answer: Risk Report

The Risk Report provides a summary of information on overall project risk and individual project risks for stakeholders. While the Risk Register is a detailed log of all identified risks and their characteristics, the Risk Report synthesizes this information to give a high-level overview suitable for communication and strategic decision-making.

During the Identify Risks process, a project manager facilitates a session with the team and key stakeholders. They review project documents, analyze assumptions, and use a technique where a facilitator solicits risk ideas anonymously in several rounds to prevent bias and groupthink. Which information-gathering technique is being described?

Answer: Delphi Technique

The Delphi technique is a method used to reach a consensus of experts on a subject. It involves soliciting opinions from experts anonymously through a series of questionnaires. This anonymity prevents influential individuals from dominating the process and encourages more open and unbiased input, making it a powerful tool for risk identification.