Project Management Risk Management and Mitigation 4 — Questions and Answers
Question 1: Which of the following is a key difference between a 'risk' and an 'issue' in project management?
- A risk has already occurred; an issue has not yet happened
- An issue has already occurred; a risk is an uncertain future event (Correct answer)
- A risk always has a negative impact; an issue can be positive
- An issue is tracked in the risk register; a risk is tracked in the issue log
Correct answer: An issue has already occurred; a risk is an uncertain future event
A risk is an uncertain future event that may affect project objectives, while an issue is a problem or situation that has already occurred.
Question 2: What type of risk analysis uses techniques such as decision tree analysis and sensitivity analysis?
- Qualitative risk analysis
- Quantitative risk analysis (Correct answer)
- Residual risk analysis
- Root cause analysis
Correct answer: Quantitative risk analysis
Quantitative risk analysis uses numerical techniques like decision trees and sensitivity analysis to estimate the effect of risks on project objectives.
Question 3: A project manager learns that a competitor plans to release a similar product two months before her project's launch. From a risk management perspective, this is BEST classified as:
- An internal risk
- An external risk (Correct answer)
- A technical risk
- A residual risk
Correct answer: An external risk
External risks originate outside the project and organization, such as market competition, regulatory changes, or economic shifts.
Question 4: When using the 'exploit' strategy in risk response planning, the project manager is:
- Transferring a negative risk to a third party
- Taking action to ensure a positive risk opportunity definitely occurs (Correct answer)
- Accepting a threat and monitoring it passively
- Reducing the likelihood of a negative risk event
Correct answer: Taking action to ensure a positive risk opportunity definitely occurs
Exploit is a response strategy for opportunities that seeks to eliminate uncertainty by making sure the positive event actually happens.
Question 5: A project manager sets aside $50,000 to handle identified risks and $20,000 for unknown risks. What are these reserves called, respectively?
- Management reserve and contingency reserve
- Contingency reserve and management reserve (Correct answer)
- Risk budget and contingency fund
- Operational reserve and risk allowance
Correct answer: Contingency reserve and management reserve
Contingency reserves address identified known-unknown risks, while management reserves are for unknown-unknown risks that were not anticipated.
Question 6: Which risk identification technique involves gathering a group of subject matter experts to brainstorm risks without judgment or criticism?
- Delphi technique
- Brainstorming (Correct answer)
- Nominal group technique
- Affinity diagrams
Correct answer: Brainstorming
Brainstorming brings together SMEs to freely generate risk ideas in an open, non-judgmental environment to maximize the number of risks identified.
Question 7: A tornado watch is issued for the area where a project's outdoor event is being held. The project team has no contingency plan for this scenario. What type of planning failure does this represent?
- Failure to perform quantitative risk analysis
- Failure to identify and plan for a foreseeable risk (Correct answer)
- Failure to create a risk management plan
- Failure to execute the risk response plan
Correct answer: Failure to identify and plan for a foreseeable risk
A tornado watch in a weather-prone region is a foreseeable risk that should have been identified and addressed with a contingency plan during risk planning.
Project Management Risk Management and Mitigation 4
Which of the following is a key difference between a 'risk' and an 'issue' in project management?