Project Risk Management

Q1. In your project, you are creating a diagram that describes the decision under
consideration and implications of choosing one or another of the available alternatives.
This will help to:
1. Get a qualitative analysis of the risk
2. Determine which risks may have the most impact on the project
3. Translate the uncertainties at a detailed level into potential impact on objectives
expressed at the level of the total project
4. Determine which decision yields the greatest expected value

Q2. As a project manager, you are concerned with determining which risks may affect the
project. What is the process by which such risks are determined?
1. Plan Risk Management
2. Identify Risks
3. Perform Qualitative Risk Analysis
4. Plan Risk Responses

Q3. In your project, you have identified important risks and planned appropriate
responses to the risks. Some risks, such as the possibility of natural disasters impacting the
project, have been documented and accepted in the risk register. What are the remaining
risks called?
1. Unidentifiable Risks
2. Residual Risks
3. Secondary Risks
4. Accepted Risks

Q4. Workarounds differs from contingency plans in that:

1. Contingency plans are planned in advance and workarounds are not planned in advance.
2. Workarounds are planned in advance and contingency plans are not planned in advance.
3. Contingency plans include plans for force majeure events, e.g. natural calamities, but
workarounds are the residual risks in the project.
4. Workarounds only include plans for force majeure events, e.g. natural calamities
Q5. You are the project manager of a project which involves off-shore oil exploration. Since
you cannot plan for all eventualities, you establish a contingency reserve, including
amounts of time, money, or resources to handle the risks. This is an example of:
1. Risk avoidance
2. Risk transfer
3. Active risk acceptance Project Risk Management
4. Improper risk planning since all risks should be identified and accounted

Q6. Please refers to the Decision Tree diagram given below. It shows the analysis of
profit/loss for the two alternatives (i.e., to build or buy).

What is the opportunity cost if the project manager decides to build instead of buy?
1. - $1,500
2. $3,500
3. $1,500
4. $5,000

Q7. As part of the risk management process, you have just created an overall risk ranking
of the project and a list of prioritized identified risks which need additional analysis and
determined trends in risk analysis results. What should you do next?
1. Analyze the effect of identified risks on overall project objectives
2. Create a list of identified risks
3. Maintain a risk register
4. Make a list of potential responses to the risks

Q8. In your project, probabilities are estimated and the alternatives are expected to be as
follows: 25% probability for $ 25,000 profit 50% probability for $ 40,000 profit 25%
probability for $ 100,000 profit What is the expected profit in your project?
1. $ 40,000
2. $ 50,000
3. $ 51,250
4. $ 53,750
Q9. Project Risk Management includes the processes of conducting risk management
planning, identification, analysis, response planning, response implementation and
monitoring risk on a project. In this context, which of the following statements about risk
is not accurate?
1. Risk is an uncertain event or condition.
2. Risks have to be identified and properly managed.
3. Risk management should be done throughout the project.
4. Risk has a negative impact on the project objective.

Q10. You have completed the process of developing options and actions to enhance
opportunities and to reduce threats to project objectives. What is your NEXT step?
1. Determine which risks may affect the project and document their characteristics.
2. Implement risk response plans, track identified risks, monitor residual risks, identify new
risks, and evaluate risk process effectiveness throughout the project.
3. Define how to conduct risk management activities for a project.
4. Assess the priority of identified risks using their probability of occurrence.

Q 11. In your project, the project architect met with an accident and will not be available
for the next 3 months. You had not planned for this in risk planning - what should you do
NEXT?
1. Create a Workaround
2. Create a Fallback Plan
3. Do additional risk response planning
4. Create a new risk register for this risk

[Link] are in the process of creating a risk management plan for your project. This plan
will describe how risk management will be structured and performed on the project. Your
risk management plan may include:
1. Avoid, transfer, mitigate, and accept risks
2. Risk audits, reserve analysis, and technical performance analysis
3. List of identified risks, potential risk owners, list of potential risk responses
4. Funding, timing, and risk categories

[Link] of the following tools and techniques would you NOT use in your project
during the Plan Risk Responses process?
1. Strategies for negative risks or threats
2. Contingent response strategies
3. Expert judgment
4. Simulation
[Link] have geographically dispersed team members, from whom you would like to
anonymously obtain expert opinion on the project you are managing. Which information
gathering technique should you use?
1. Brainstorming
2. Delphi technique
3. SWOT analysis
4. Checklists

[Link] representations of situations showing causal influences, time ordering of

events, and other relationships among variables and outcomes are also referred to as:
1. Cause-and-effect diagrams
2. System flow charts
3. Influence diagrams
4. Simulation diagrams

[Link] are in the build phase of a Build-Operate-Transfer (BOT) project, which has run
into several unanticipated problems. Several risks have surfaced which you had not
anticipated earlier. The project is over-budget and significantly behind schedule. What
should you do?
1. Create updates to risk response plan
2. Create a revised project plan
3. Perform risk audits
4. Perform updated risk identification and analysis

[Link] managing a project, you decide to create a prototype of your product first to
ensure that it is acceptable to stakeholders before creating your product. This is an
example of:
1. Risk mitigation
2. Risk avoidance
3. Risk transfer
4. Project assumptions testing
Q18. You are the project manager for XYZ company. The Quality Control team recently
identified a large number of defects in the project deliverables which the team had to
repair. You have been working for a few weeks with the Quality Assurance team to adjust
some quality procedures and address some training issues for your project which the team
believes is the reason for the defects. The project is now behind schedule due to the
problems encountered. The CPI is currently 1.12 and the SPI 0.82. While discussing the
quality issues in a status meeting, a key stakeholder comments that she is alarmed at the
potential cost impact of one particular risk and is wondering why it is of little concern to
the project team. You are confident that her concern for that particular cost risk is
unwarranted at the moment; in fact, you believe there is another risk that is of bigger
concern.

The following table displays the current risks for your project. Considering that schedule is
a concern right now, which risk are you going to tell the stakeholder and other meeting
participants is the greatest and is therefore the biggest concern of the team right now?

1. A
2. B
3. A & B
4. D

[Link] are the project manager in an automobile manufacturing company. Machine

parts required in your manufacturing process supplied by a vendor did not reach in time
because of heavy rains. You had anticipated this risk and planned for it in your risk
response plan. So, as per your risk response plan, you started using unutilized machine
parts supplied one year ago. However, this has subjected your project to a new risk - the
machine parts which were not used for one year suffer from higher level of defects. This
new risk can also be called:

1. Unidentifiable risks
2. Unmanageable risks
3. Secondary risks
4. Residual risks
Q20. Based on past estimates, there is a 25% probability for a particular event to occur
every year. If a project lasts for three years, what is the probability of the event happening
in the third year?
1. 15.625 %
2. 6.25 %
3. 25%
4. 75%

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