Project Management Risk Management and Mitigation 3 — Questions and Answers
Question 1: A project sponsor asks for a single number that summarizes the overall risk exposure of the project. Which technique BEST provides this?
- Qualitative risk analysis
- Expected Monetary Value (EMV) analysis (Correct answer)
- SWOT analysis
- Risk categorization
Correct answer: Expected Monetary Value (EMV) analysis
EMV multiplies the probability of each risk by its monetary impact and sums them up to produce an overall risk exposure figure.
Question 2: Which of the following is an example of an 'opportunity' in the context of project risk management?
- A vendor delivering materials two weeks early, freeing up schedule buffer (Correct answer)
- A critical team member leaving the project
- An unexpected regulatory requirement being added
- A software tool failing during testing
Correct answer: A vendor delivering materials two weeks early, freeing up schedule buffer
In risk management, opportunities are uncertain events with positive impacts on project objectives, such as early delivery that adds schedule float.
Question 3: What is the purpose of a 'risk register' in project management?
- To formally authorize the project and assign the project manager
- To document identified risks, their characteristics, and planned responses (Correct answer)
- To track project issues that have already occurred
- To record stakeholder complaints about project risks
Correct answer: To document identified risks, their characteristics, and planned responses
The risk register is a central document that captures all identified risks, their probability, impact, owners, and planned response strategies.
Question 4: During Monte Carlo simulation for schedule risk analysis, what is the PRIMARY output?
- A list of the top ten risks by probability
- A probability distribution of possible project completion dates (Correct answer)
- A precise single completion date with no variance
- An updated project baseline schedule
Correct answer: A probability distribution of possible project completion dates
Monte Carlo simulation runs thousands of schedule scenarios to produce a probability distribution showing the likelihood of finishing by various dates.
Question 5: A project is facing a risk that the project team cannot control or mitigate. What is the MOST appropriate response strategy?
- Transfer
- Avoid
- Accept
- Escalate (Correct answer)
Correct answer: Escalate
Escalation is used when a risk is outside the project manager's authority or control and must be handled at a higher organizational level.
Question 6: Which document establishes the thresholds and processes for managing risk on a project?
- Risk register
- Risk management plan (Correct answer)
- Issue log
- Stakeholder engagement plan
Correct answer: Risk management plan
The risk management plan defines how risk management activities will be structured, including roles, methodologies, risk categories, and thresholds.
Question 7: A construction project is delayed because flooding damaged the site—an event that was identified but accepted. What is the PM's FIRST step now that the risk has occurred?
- Update the probability in the risk register to 100%
- Execute the planned contingency response (Correct answer)
- Perform a new qualitative risk analysis
- File an insurance claim before taking any project action
Correct answer: Execute the planned contingency response
When an accepted risk event occurs, the project manager should immediately execute the pre-planned contingency response to minimize impact.
Project Management Risk Management and Mitigation 3
A project sponsor asks for a single number that summarizes the overall risk exposure of the project.
Which technique BEST provides this?