Project Risk Management Project Risk Management 3 — Questions and Answers
Question 1: Which technique uses expert judgment and group brainstorming to identify risks that may affect the project?
- Delphi technique (Correct answer)
- Monte Carlo simulation
- Root cause analysis
- Sensitivity analysis
Correct answer: Delphi technique
The Delphi technique collects anonymous expert opinions iteratively to reach consensus on risk identification.
Question 2: A risk response that reduces the probability or impact of a threat is known as:
- Transfer
- Exploit
- Mitigate (Correct answer)
- Enhance
Correct answer: Mitigate
Mitigation involves taking early action to reduce the likelihood or consequence of a negative risk event.
Question 3: When a risk response creates a new risk, the new risk is called a:
- Residual risk
- Secondary risk (Correct answer)
- Trigger
- Workaround
Correct answer: Secondary risk
Secondary risks arise as a direct result of implementing a risk response and must also be managed.
Question 4: Which of the following BEST describes a risk appetite?
- The maximum risk a project can tolerate before it is stopped
- The degree of uncertainty an organization is willing to accept (Correct answer)
- The exact probability of a risk occurring
- The cost of a risk response plan
Correct answer: The degree of uncertainty an organization is willing to accept
Risk appetite reflects how much risk an organization is willing to take in pursuit of its objectives.
Question 5: In quantitative risk analysis, which technique determines which risks have the most potential impact on project objectives?
- Risk categorization
- Probability and Impact Matrix
- Sensitivity analysis (Correct answer)
- Risk audits
Correct answer: Sensitivity analysis
Sensitivity analysis (often shown as a tornado diagram) identifies which variables have the greatest effect on project outcomes.
Question 6: A project team decides to eliminate a specific project activity to remove an associated risk. This strategy is called:
- Mitigate
- Transfer
- Avoid (Correct answer)
- Accept
Correct answer: Avoid
Risk avoidance changes the project plan to eliminate the threat entirely, often by removing scope or changing the approach.
Question 7: Risk thresholds are MOST important for:
- Estimating contingency reserves
- Determining which risks require a response plan (Correct answer)
- Calculating EMV
- Assigning risk owners
Correct answer: Determining which risks require a response plan
Risk thresholds define the boundary above which risks must have a formal response plan developed.
Project Risk Management Project Risk Management 3
Which technique uses expert judgment and group brainstorming to identify risks that may affect the project?