Project Risk Management Quantitative Risk Analysis 5

Question 1

A project team sets a contingency reserve at the P70 level from simulation results. What risk remains unaddressed by this reserve?

Accepted Answer

The 30% of scenarios that exceed the P70 estimate

Answer

A P70 reserve covers 70% of simulated scenarios; the remaining 30% of worse outcomes are not covered and would require management reserve or escalation.

Question 2

What is 'risk exposure' in the context of quantitative risk analysis?

Accepted Answer

The total expected monetary impact across all quantified risks

Answer

Risk exposure aggregates the expected monetary values of all quantified risks to represent the overall financial impact the project faces.

Question 3

Which technique helps a project manager understand how variability in one input variable affects the overall project outcome, holding all other variables constant?

Accepted Answer

Sensitivity analysis

Answer

Sensitivity analysis varies one input at a time while keeping others fixed, isolating that variable's contribution to overall output variability.

Question 4

A sponsor asks why the quantitative risk analysis result differs from the deterministic project estimate. What is the best explanation?

Accepted Answer

Quantitative analysis models uncertainty ranges, producing a probability distribution rather than a single point estimate

Answer

Deterministic estimates use single-point values, while quantitative analysis replaces those points with probability distributions, revealing the range of possible outcomes.

Question 5

A project team uses an influence diagram as part of quantitative risk analysis. What does an influence diagram depict?

Accepted Answer

Causal relationships and dependencies among project variables, decisions, and uncertainties

Answer

An influence diagram is a graphical representation showing how decisions, uncertainties, and outcomes are causally related and interdependent.

Project Risk Management Practice Test

Project Risk Management Practice Test

Project Risk Management Quantitative Risk Analysis 5