Project Risk Management Project Risk Management MCQ 4 — Questions and Answers
Question 1: What is the expected monetary value (EMV) of a risk with a 30% probability of occurring and an impact of -$50,000?
- -$15,000 (Correct answer)
- -$50,000
- -$35,000
- -$20,000
Correct answer: -$15,000
EMV = Probability × Impact = 0.30 × -$50,000 = -$15,000.
Question 2: Which document formally authorizes the project and could contain high-level risks?
- Project management plan
- Risk register
- Project charter (Correct answer)
- Stakeholder register
Correct answer: Project charter
The project charter is the document that formally authorizes the project and may include a summary of known risks.
Question 3: A risk has a high probability but very low impact. According to qualitative analysis, it should be classified as:
- High priority
- Medium priority
- Low priority (Correct answer)
- Critical
Correct answer: Low priority
In a probability-impact matrix, a risk with high probability but low impact typically falls into the low or medium priority zone.
Question 4: What is the difference between a risk and an issue in project management?
- Issues are documented; risks are not
- A risk is a potential future event; an issue has already occurred (Correct answer)
- Risks always have negative impacts; issues can be positive
- Issues require sponsor approval; risks do not
Correct answer: A risk is a potential future event; an issue has already occurred
A risk is an uncertain future event that may or may not happen, while an issue is a current problem that has already materialized.
Question 5: Which risk response is most appropriate when two organizations share both the benefits and costs of a positive risk?
- Exploit
- Enhance
- Share (Correct answer)
- Accept
Correct answer: Share
Sharing allocates ownership of an opportunity to a third party who is best able to capture the benefit, with both parties sharing the outcome.
Question 6: A project manager reviews the risk register at every status meeting. This is part of which process?
- Plan Risk Management
- Identify Risks
- Monitor Risks (Correct answer)
- Implement Risk Responses
Correct answer: Monitor Risks
Monitor Risks is the ongoing process of tracking identified risks, reassessing them, and verifying that risk responses are effective.
Question 7: The risk breakdown structure (RBS) is used to:
- Assign budget to each risk
- Categorize and organize risks by source or type (Correct answer)
- Rank risks by priority
- Identify risk owners
Correct answer: Categorize and organize risks by source or type
An RBS is a hierarchical framework that organizes identified risks into logical categories to help ensure comprehensive risk identification.
Project Risk Management Project Risk Management MCQ 4
What is the expected monetary value (EMV) of a risk with a 30% probability of occurring and an impact of -$50,000?