Project Risk Management Quantitative Risk Analysis 4

Question 1

Which of the following is the primary output of the Perform Quantitative Risk Analysis process according to the PMBOK Guide?

Accepted Answer

Risk report updates with quantified overall project risk exposure

Answer

The main output is an updated risk report containing quantified overall project risk exposure, including probability distributions and key percentile values.

Question 2

A project is 60% complete. The original budget was $500K and the cost performance index (CPI) is 0.80. What is the estimate at completion (EAC)?

Accepted Answer

$625,000

Answer

EAC = BAC ÷ CPI = $500,000 ÷ 0.80 = $625,000.

Question 3

In quantitative risk analysis, what is the key difference between a risk's 'probability' and its 'impact'?

Accepted Answer

Probability is the likelihood of occurrence; impact is the consequence if it occurs

Answer

Probability measures how likely a risk event is to occur, while impact measures the magnitude of the effect on project objectives if it does occur.

Question 4

A Monte Carlo simulation of 10,000 iterations shows 2,500 runs exceeded the $1M budget. What is the probability of staying within budget?

Accepted Answer

75%

Answer

7,500 out of 10,000 runs stayed within budget, so the probability = 7,500 ÷ 10,000 = 75%.

Question 5

Which of the following is a limitation of using Expected Monetary Value (EMV) as the sole basis for risk decisions?

Accepted Answer

EMV ignores risk aversion and the actual utility of outcomes to decision makers

Answer

EMV treats all stakeholders as risk-neutral, ignoring the real-world fact that a large loss may be catastrophic even if statistically offset by expected gains.

Project Risk Management Practice Test

Project Risk Management Practice Test

Project Risk Management Quantitative Risk Analysis 4