PMI-RMP Quantitative Risk Analysis 3

Question 1

Contingency reserve for cost is best determined by which quantitative output?

Accepted Answer

The difference between a target confidence level (e.g., P80) and the base estimate

Answer

Contingency reserve is the gap between the chosen confidence percentile and the deterministic base estimate.

Question 2

A correlation coefficient of +0.9 between two cost inputs in a simulation means what?

Accepted Answer

The two inputs tend to move strongly in the same direction together

Answer

A high positive correlation means the variables tend to rise and fall together, widening total variance.

Question 3

Which input quality issue most undermines the credibility of a Monte Carlo result?

Accepted Answer

Poorly estimated distributions and ignored correlations (garbage in, garbage out)

Answer

Simulation outputs are only as good as the distribution and correlation assumptions fed into them.

Question 4

Expected value of a contingency decision is calculated by combining what two factors across outcomes?

Accepted Answer

Probability and monetary impact of each outcome

Answer

EMV across outcomes multiplies each outcome's probability by its impact and sums the results.

Question 5

In sensitivity analysis, a variable shown with a very short bar on a tornado diagram indicates what?

Accepted Answer

It has relatively little influence on the outcome

Answer

Short bars represent low sensitivity, meaning the variable barely moves the result.

PMI-RMP Practice Test