Project Risk Management Professional Standards & Competencies 3 — Questions and Answers
Question 1: Which of the following BEST describes the concept of 'risk ownership' as a professional standard in project risk management?
- The project manager assumes all risk responsibilities
- A designated individual is accountable for monitoring and managing a specific risk (Correct answer)
- Risk ownership rotates among team members weekly
- Risks are owned collectively by the entire project team with no individual accountability
Correct answer: A designated individual is accountable for monitoring and managing a specific risk
Assigning a risk owner for each identified risk ensures clear accountability for monitoring and executing the risk response.
Question 2: The PMI Code of Ethics includes four core values. Which combination is correct?
- Responsibility, Respect, Fairness, Honesty (Correct answer)
- Accountability, Transparency, Integrity, Reliability
- Responsibility, Respect, Creativity, Honesty
- Fairness, Accuracy, Reliability, Transparency
Correct answer: Responsibility, Respect, Fairness, Honesty
PMI's Code of Ethics and Professional Conduct is built on four values: responsibility, respect, fairness, and honesty.
Question 3: A risk manager notices a conflict of interest because their spouse works for a vendor bidding on the project. What should they do?
- Participate normally since personal relationships don't affect professional judgment
- Disclose the conflict of interest to their manager and recuse themselves from vendor evaluation (Correct answer)
- Only disclose if the vendor wins the bid
- Ask their spouse to withdraw the vendor's bid
Correct answer: Disclose the conflict of interest to their manager and recuse themselves from vendor evaluation
PMI's fairness principle requires proactive disclosure of conflicts of interest and recusal from affected decisions to protect project integrity.
Question 4: Which professional standard requires that risk management processes be tailored to the size, complexity, and importance of each project?
- ISO 31000 scalability principle (Correct answer)
- PMI uniform application standard
- PRINCE2 mandatory risk procedure
- AACE baseline estimate requirement
Correct answer: ISO 31000 scalability principle
ISO 31000 explicitly requires that risk management frameworks and processes be customized and proportionate to the organization's context and project characteristics.
Question 5: In professional risk management practice, what distinguishes 'risk appetite' from 'risk tolerance'?
- They are interchangeable terms
- Risk appetite is the strategic level of risk an organization is willing to accept; risk tolerance is the acceptable variation around objectives (Correct answer)
- Risk tolerance is broader than risk appetite
- Risk appetite applies only to financial risks
Correct answer: Risk appetite is the strategic level of risk an organization is willing to accept; risk tolerance is the acceptable variation around objectives
Risk appetite is a high-level strategic statement of willingness to accept risk, while risk tolerance defines specific measurable thresholds for acceptable deviation.
Question 6: A risk practitioner is asked by a client to omit certain risks from the risk register to present a more optimistic picture to investors. The practitioner should:
- Comply since the client has authority over the project
- Refuse and explain that accurate risk documentation is a professional and ethical obligation (Correct answer)
- Omit the risks but keep a private record
- Transfer the task to another team member
Correct answer: Refuse and explain that accurate risk documentation is a professional and ethical obligation
Misrepresenting risk information to stakeholders violates PMI's honesty principle and could expose stakeholders to undisclosed threats.
Question 7: Which element is a key competency for a project risk manager when performing qualitative risk analysis?
- Advanced statistical modeling skills
- Ability to facilitate group judgment and apply structured scoring techniques (Correct answer)
- Expertise in financial derivatives
- Proficiency in network diagram creation
Correct answer: Ability to facilitate group judgment and apply structured scoring techniques
Qualitative risk analysis relies heavily on facilitated expert judgment using tools like probability-impact matrices, requiring strong facilitation skills.
Project Risk Management Professional Standards & Competencies 3
Which of the following BEST describes the concept of 'risk ownership' as a professional standard in project risk management?