Project Risk Management Project Risk Management MCQ 4

Question 1

What is the expected monetary value (EMV) of a risk with a 30% probability of occurring and an impact of -$50,000?

Accepted Answer

-$15,000

Answer

EMV = Probability × Impact = 0.30 × -$50,000 = -$15,000.

Question 2

Which document formally authorizes the project and could contain high-level risks?

Accepted Answer

Project charter

Answer

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:

Accepted Answer

Low priority

Answer

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?

Accepted Answer

A risk is a potential future event; an issue has already occurred

Answer

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?

Accepted Answer

Share

Answer

Sharing allocates ownership of an opportunity to a third party who is best able to capture the benefit, with both parties sharing the outcome.

Project Risk Management Practice Test