Project Risk Management

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1. Project Risk Project Risk is an uncertain

event or condition that, if it oc-
curs, has a positive or nega-
tive effect on a project's objec-
tives.

2. What's the role of Risk Management? 1. It addresses the uncertain-

ty in project estimates and as-
sumptions
2. It's not a substitute for other
PM processes
3. It's applicable throughout a
project life cycle
4. It provides realistic ex-
pectations for the completion
date and cost of the project
5. It enhances the value
of other project management
processes

3. How will you practice good Risk Manage- 1. Consistent with existing or-
ment? ganization practices and poli-
cies
2. Appropriate to the project
3. Implemented according to
business challenges and mul-
ti-cultural environment
4. Conducted in compliance
with the internal and external
requirements of the project.
5. Conducted ethically ac-
cording to the PM code of
ethics
6. Conducted on all projects in
proportion to the characteris-
tics of the project under man-
agement

4.
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 Project Risk Management
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6 Critical Success Factors for Project Risk 1. Recognize the value of Risk
Management Mgmt
2. Individual Commitment Re-
sponsibility
3. It's necessary to have open
and honest communication
4. Organizational commit-
ment
5. Risk efforts scaled to pro-
ject
6. Integration with Project
Management

5. Project Risk Management Includes the processes con-

cerned with conducting risk
management planning, iden-
tification, analysis, respons-
es, and monitoring and con-
trol of a project.

6. Purpose of Project Risk Management To increase the probability

and impact of positive en-
vents and decrease the prob-
ablity and impact of events
adverse to project objectives.

7. Project Life Cycle A collection of generally

sequential project phases
whose name and number
are determined by the con-
trol need of organization(s) in-
volved in the project.

8. A life cycle can be documented with a _____ methodology

.

9. Project Management The application of knowledge,

skills, tools and techniques to
project activities to meet the
project requirements.
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 Project Risk Management
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10. RM Study Introduces us to the concepts

of Risk Management

11. Risk Management A principaled approach and

process for identifying and as-
sessing risks, and then plan-
ning and implementing risk
responses.

12. PMI Practice Standard PMI practice standard de-

scribes processes, activities,
inputs, and outputs for a spe-
cific knowledge area. It pro-
vides information about the
significance of the process,
tools and techniques applied,
execution and personnel in-
volved. It does not prescribe
how the process is to be im-
plemented, leaving that sub-
ject for other forums such
as handbooks, manuals, and
courses.

13. Practice standards are targeted at audi- audiences who participate in

ences such as: the management of projects.
This includes project man-
agers, project personnel, con-
tract personnel, supervisors,
and other project stakehold-
ers.

14. The purpose of the Practice Standard for provide a standard for pro-
Risk Management is to: ject management practition-
ers and other stakeholders
that defines the aspects of
Project Management that are
recognized as good practice
on most projects most of the
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time and provide a standard
that is globally applicable and
consistently applied.

15. The Project Risk Management includes conducting risk manage-

processes concerned with: ment planning, identification,
analysis, responses, monitor-
ing and control on a project.
The objectives are also to in-
crease the probability and im-
pact of positive events and
decrease the probability and
impact of negative events in
the project.

16. Uncertainty Distinct events which are un-

certain but can be clearly de-
fined, as well as more general
conditions which are less spe-
cific.

17. Cause Events or circumstances that

currently exist or will exist in
the future and may result in
risks.

18. Effect Conditional future events or

conditions which would di-
rectly affect project objectives
if the associated risk hap-
pened.

19. Problem Negative effect on project ob-

jective from occurrence of a
threat.

20. Benefits Are opportunities which have

occurred which are beyond
the scope of the Project Risk
Managment process.
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21. What are Individual Risks? A specific uncertain evenot or

condition which, if it occurs,
has a positive or negative ef-
fect on at least one project ob-
jective.

22. What is Overall Project Risk? The effect of uncertainty on

the project in it's entirety. It
represents stakeholders' ex-
posure to implications of vari-
ations on project outcome
and is crucial in strategic de-
cision-making, program and
portfolio management, and
project governance.

23. Factors that influence Stakeholders Risk 1. Scale of the Project

Attitudes 2. Culture of the Organization
3. Strength of public com-
mitments made about project
performance.
4. Stakeholders sensitivity to
issues such as environmen-
tal impacts and industrial re-
lations

24. Iterative Project Periodic reviews and updates

are required in Risk Manag-
ment process as it is in the
nature of projects to undergo
hange.

25. The frequency and detail of reviews and 1. Nature of the project
updates for risk depends on: 2. Volatility of the project in
which the project is being im-
plemented
3. Timing of other project
management reviews and up-
dates
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26. The overall project communication strategy the communication of the

should reflect: results of the Project Risk
Management process and it
should identify each stake-
holder's responsibility and
role in risk management.

27. What is a Project Manager's Role in Project The Project Manager is re-
Risk Management? sponsible for the efficient
running of risk management
process.

1. Encourage senior manager

support for Project Risk Man-
agement

2. Promote and participate in

all it's activities

3. Monitor its efficiency

28. The PM responsible for is to facilitate com- 1. facilitate communication

munication about risk within: about risk within the project
team and with management
and stakeholders

2. reporting risk status to

stakeholders with recommen-
dations forstragegic decisions
and actions

3. Develop and approve risk

management plan.

29. The PM is to approve risk responses ____ The PM is to approve risk re-
to ____; audit them for _____ and document sponses prior to implementa-
_____ _____. tion audit them for effective-
ness and document lessons
learned.
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30. The PM is to apply project _____ _____ to contigency funds

deal with identified risks.

31. The PM is to oversee risk management by subcontractors and suppliers

_____ and _____

32. The PM is to _____ risks which are outside The PM is to escalate risks
the PM's authority - which require _____ which are outside the PM's
from outside the project or which require authority - which require in-
release of _____ _____ to senior manage- put from outside the project
ment. or which require relsease of
management funds to senior
management.

33. Threat (the opposite of Opportunity) A condition or situation un-

favourable to a project, a neg-
ative set of circumstances, a
negative set of events; a risk
that will have a negative im-
pact on a project objective if
it occurs, or a possibility for
negative changes.

34. According to PMI, which of the following is b. 'Project risk is an uncer-

the appropriate definition of project risk? tain event or condition that, if
it occurs, has a positive or a
a. 'Project risk is an uncertain condition negative effect on a project's
that, if it occurs, has a positive effect on a objective'.
project's objective'.

b. 'Project risk is an uncertain event or con-

dition that, if it occurs, has a positive or a
negative effect on a project's objective'.

c. 'Project risk is an uncertain event, if it

occurs, has a negative effect on a project's
objective'.

d. 'Project risk is an event or condition that

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 Project Risk Management
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has a positive or a negative effect on a pro-
ject's objective'.

35. Which of the following are the two dimen- a. Probability and impact
sions of risk that need to be considered
during the assessment of a risk?

a. Probability and impact

b. Positive and negative effects
c. Uncertainty and positive impact on pro-
ject's objectives
d. Probability and negative impact on pro-
ject's objectives

36. What are the two types of project risks c. Threats and opportunities
which are classified on the basis of their
effect on a project's objectives?

a. Probable and definite risks

b. Financial and non-financial risks
c. Threats and opportunities
d. Positive and negative threats

37. Which of the following statements on pro- d. Project Risk Management

ject risk and risk-related features is INCOR- must address only the posi-
RECT? tive risks of the project to en-
hance the achievability of pro-
a. Risk causes are events or circumstances ject's objectives.
which currently exist or are certain to exist
in the future and which might give rise to
risks.

b. Risk effects are conditional future events

or conditions which would directly affect
one or more project objectives if associated
risk occurs.

c. Project risk when it occurs loses its char-

acteristic of 'uncertainty'.

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d. Project Risk Management must address

only the positive risks of the project to en-
hance the achievability of project's objec-
tives.

38. Negative risks or threats when they occur a. Issues or problems

are called as:

a. Issues or problems
b. Outcomes
c. Outputs
d. Benefits

39. Positive risks or opportunities when they Benefits

occur are called as:

40. The following are statements on individual b. Overall project risk is the
and overall project risks. Identify the IN- sum of all individual risks
CORRECT statement from among these. that have occurred during the
course of project execution.
a. Day-to-day Project Risk Management fo-
cuses on individual project risks in order
to enhance the prospects of a successful
project outcome.

b. Overall project risk is the sum of all indi-

vidual risks that have occurred during the
course of project execution.

c. Overall project risk represents the effect

of uncertainty on the project as a whole.

d. An individual risk may positively or neg-

atively affect the one or more project objec-
tives whereas overall project risk exposes
stakeholders to implications of variations in
the project outcome.

41. Risk Management Planning

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 Project Risk Management
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Understanding stakeholder risk attitudes is
an important part of which of the following
processes or activities?

42. Which of the following statements on stake- c. A stakeholder can adopt dif-
holder risk attitudes is TRUE? ferent risk attitudes at differ-
ent stages of a project.
a. An internal stakeholder's risk attitude is
not affected or influenced by the external
factors such as environment, government
regulations, etc.

b. Stakeholder risk attitude does not influ-

ence the planning for risk on a project.

c. A stakeholder can adopt different risk

attitudes at different stages of a project.

d. Stakeholder risk attitude must be identi-

fied and understood at the beginning of the
project and evaluated on completion of the
project for documentation of changes in the
stakeholder risk attitude.

43. The communication requirements of the Project communications man-

stakeholders with regard to the results agement strategy
of the Project Risk Management process
should be documented in which manage-
ment strategy?

44. Which of the following is NOT among the c. Sanctioning or cancelling

roles performed by a project manager? project investment and set-
ting priorities for the project.
a. Overseeing risk management by subcon-
tractors and suppliers.

b. Escalating identified risks that are be-

yond his delegated limits to senior manage-
ment.

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 Project Risk Management
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c. Sanctioning or cancelling project invest-

ment and setting priorities for the project.

d. Approving risk responses and associat-

ed actions prior to implementation.

45. Who is ultimately responsible for the out- Project Manager

come of the project?

46. All projects are _____ since they are based All projects are uncertain
on _____ and _____. since they are based on as-
sumptions and constraints.

47. Project Risk Management processes de- structured approach for un-
scribe a: derstanding and managing
risk in a project.

48. What are the steps that have to be followed 1. All projects are exposted
for effective Project Risk Management? to risk only in relation to their
objectives.
2.

49. The _____ of a project must be clearly de- objectives

fined for a succesful, implentation of Pro-
ject Risk Management

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