PrepL Risk Management and Liability

Question 1

What is the first step in the risk management process?

Accepted Answer

Risk identification — recognizing potential threats and opportunities

Answer

Risk transfer through insurance

Answer

Risk avoidance by stopping all activities

Answer

Risk acceptance without analysis

Question 2

How is risk typically measured?

Accepted Answer

By the probability of occurrence multiplied by the potential impact

Answer

By the number of stakeholders affected only

Answer

By the cost of insurance premiums

Answer

By the opinion of the most senior manager

Question 3

What is risk mitigation?

Accepted Answer

Taking actions to reduce the probability or impact of identified risks

Answer

Ignoring risks that seem unlikely

Answer

Transferring all risks to insurance companies

Answer

Eliminating all project activities that involve any risk

Question 4

What is the purpose of a risk register?

Accepted Answer

To document identified risks, their analysis, and planned responses

Answer

To list all project team members and their roles

Answer

To record only financial risks

Answer

To track daily activities

Question 5

When should risk assessment be performed during a project?

Accepted Answer

Throughout the entire project lifecycle, not just at the beginning

Answer

Only during the planning phase

Answer

Only after a risk event occurs

Answer

Only at project completion for lessons learned

Question 6

What is the difference between risk avoidance and risk acceptance?

Accepted Answer

Avoidance eliminates the risk entirely; acceptance acknowledges it without active response

Answer

They are the same concept

Answer

Avoidance is always preferred to acceptance

Answer

Acceptance means the risk is transferred to another party