PMI-RMP Quantitative Risk Analysis 2 — Questions and Answers
Question 1: In a Monte Carlo simulation of project cost, what does the P80 value on the cumulative S-curve represent?
- An 80% chance the actual cost will be at or below that value (Correct answer)
- An 80% chance the cost will exceed that value
- The cost is 80% of the deterministic estimate
- The 80th iteration of the simulation
Correct answer: An 80% chance the actual cost will be at or below that value
P80 means there is an 80% probability the outcome will be at or below that cost value.
Question 2: A risk has a 30% probability and would cost $50,000 if it occurs. What is its expected monetary value (EMV)?
- $15,000 (Correct answer)
- $50,000
- $30,000
- $166,667
Correct answer: $15,000
EMV equals probability times impact, so 0.30 × $50,000 = $15,000.
Question 3: Which distribution is most commonly used in three-point estimating with optimistic, most likely, and pessimistic values?
- Triangular or PERT (beta) distribution (Correct answer)
- Uniform distribution
- Poisson distribution
- Binomial distribution
Correct answer: Triangular or PERT (beta) distribution
Three-point estimates feed triangular or PERT/beta distributions in quantitative analysis.
Question 4: In a decision tree, what does the EMV at a decision node typically guide the project manager to choose?
- The branch with the most favorable expected monetary value (Correct answer)
- The branch with the highest probability only
- The cheapest upfront branch
- The branch with the most sub-nodes
Correct answer: The branch with the most favorable expected monetary value
Decision-tree analysis selects the path with the best expected monetary value.
Question 5: A tornado diagram in quantitative risk analysis is primarily used to display what?
- The relative sensitivity of an outcome to individual risk variables (Correct answer)
- The chronological order of risks
- The total project budget over time
- The probability distribution of a single task
Correct answer: The relative sensitivity of an outcome to individual risk variables
Tornado diagrams rank variables by how strongly they influence the outcome, showing sensitivity.
Question 6: What is the main reason a project uses Monte Carlo simulation instead of a single deterministic estimate?
- It models combined uncertainty to produce a range of probable outcomes (Correct answer)
- It guarantees the project will finish on budget
- It eliminates the need for a risk register
- It replaces qualitative risk analysis entirely
Correct answer: It models combined uncertainty to produce a range of probable outcomes
Monte Carlo captures combined uncertainty, yielding a probability distribution rather than one number.
Question 7: When running a schedule risk simulation, which network paths are most likely to become critical under uncertainty?
- Near-critical paths with high duration variability (Correct answer)
- Only the original critical path
- Paths with the most milestones
- Paths with zero total float by definition
Correct answer: Near-critical paths with high duration variability
Near-critical paths with high variability can overtake the original critical path, revealing criticality risk.
PMI-RMP Quantitative Risk Analysis 2
In a Monte Carlo simulation of project cost, what does the P80 value on the cumulative S-curve represent?