Project Management Road Trip: PMBOK 4Th Edition: Self-Test

CHAPTER 11: RISK MANAGEMENT 11

Self-test

1. Sherman is using Monte Carlo analysis to identify schedule dependencies that could be risk factors. In what project risk management process is Monte Carlo analysis used? a. Perform Qualitative Risk Analysis b. Plan Risk Responses c. Develop Schedule d. Perform Quantitative Risk Analysis

2. The team is worried that scarce internal resources will not be able to handle the timely development of a project deliverable, so the decision was made to outsource the deliverable. Which of the following describes this type of risk response? a. Transference b. Avoidance c. Contingency d. Sharing

3. A negative risk has a 30% probability of occurring. If it does take place, it'll result in an extra $20,000 cost to the project. What is the expected monetary value of this risk? a. $7,500 b. $14,000 c. $26,000 d. $6,000

4. Which one of the following choices would not be developed through the Plan Risk Management process? a. Fallback plan b. Risk audit frequency c. Risk glossary d. Probability rating criteria

5. Which statement below is not true of project risk management? a. The interaction between scope, time, cost, and quality can lead to risk factors. b. Risks are susceptible to changes throughout the project management life cycle. c. The goal of project risk management processes is to eliminate risk from the project. d. A risk is any uncertain event with consequences.

6. Zia is establishing what rating method will be used for risk probabilities. She has chosen a scale that uses a low, medium, and high designation. What kind of scale is this? a. Continuous b. PIM c. Non-linear d. Relative

7. What tool of the Identify Risks process is used to anonymously gather opinions and analyze the results? a. Delphi technique b. Design of experiments c. SWOT analysis d. Contingent response

8. Risk audits are a tool of what process? a. Monitor and Control Risks b. Plan Risk Management c. Plan Risk Responses d. Perform Quantitative Risk Analysis

9. Project ZETA has four identified risks as shown below. Using the EMV of each, what is the risk contingency reserve for this project?

Probability Impact Risk 1 20% ($7,000) Risk 2 30% ($8,200) Risk 3 45% ($11,600) Risk 4 15% $25,000

a. ($5,330) b. $0 c. ($1,800) d. $1,400

10. Which one of the following statements includes the possible responses for threats? a. Accept, avoid, contingent, exploit, mitigate, transfer. b. Accept, avoid, contingent, mitigate, transfer c. Accept, contingent d. Avoid, mitigate, transfer

11. In response to a schedule risk that was occurring, Tory fast tracked several items on the schedule, which has now caused quality control issues that have to be addressed. What type of risk did the original risk response result in? a. Secondary risk b. Accepted risk c. Contingent risk d. Residual risk

12. Which statement is true about assumptions? a. Until definitively proven true, assumptions are always risk factors b. Assumptions are detected and validated through assumption analysis c. Assumptions are only found in the project scope statement d. Assumptions are tested through SWOT analysis

13. In which risk management process is the risk register initially created? a. Monitor and Control Risks b. Identify Risks c. Plan Risk Responses d. Plan Risk Management

14. Daniel has added lag time into the schedule as a risk response, which reduced the risk's probability of occurring from 60% down to 10%. What type of risk response was this? a. Contingency b. Mitigation c. Transference d. Avoidance

15. Waun is reviewing the list of residual risks after the first stage of risk response planning has taken place. He wants to make sure that everyone is in full agreement on what risk responses have been decided upon, so he's listing individual risks under headings of each risk response type. Of the choices below, under which heading should he put the residual risks? a. Mitigated b. Transferred c. Accepted d. Shared

16. Low priority risks can be found on which risk document? a. Probability matrix b. Risk breakdown structure c. Watchlist d. Trend analysis

17. Risk data quality assessment, risk categorization, and risk urgency assessment are tools and techniques of which risk process? a. Plan Risk Responses b. Perform Quantitative Risk Analysis c. Perform Qualitative Risk Analysis d. Monitor and Control Risks

18. Van needs to know the criteria he should use to designate an impact rating for a risk. The scale uses a 1, 2, 3, 4, or 5 rating. Where can he find out how to determine the difference between a rating of 3 and 4? a. RAG rating b. Communications management plan c. Quality management plan d. Risk management plan

19. Ronnie is in charge of overseeing a particular risk, which includes developing a planned response to an equipment risk by laying out the steps the production crew should take to prevent the risk. What risk management role below best describes her role? a. Risk sponsor b. Risk manager c. Risk leader d. Risk owner

20. One risk that Eden faces on a construction project is the price of concrete. Its price can fluctuate up or down by 10% depending on demand. She has produced a tornado diagram showing how this fluctuation might affect different phases of the project. What qualitative analysis technique is she using? a. Sensitivity analysis b. EMV c. Decision tree analysis d. Probability distribution

21. Based on input from the project team, Raoul has used a three-point estimating technique to determine each risk's probability. Three-point estimates will result in what type of probability distribution? a. Beta b. Uniform c. Continuous d. Lognormal

22. The performing organization has been acquired by another company, and it's just been announced that some personnel are having their duties reassigned and will be removed from the project team. Which of the following is the first step the project manager should do? a. Log it as a risk on the risk register b. Log this as an issue on the issue log c. Perform risk response planning d. Perform qualitative analysis

23. Of the following which is not an input to the Plan Risk Management process? a. Risk register b. Cost management plan c. Project scope statement d. Communications management plan

24. Which one of the following scenarios would not be considered a force majeure event? a. Electrical brownouts due to a sustained heat wave b. A six-week strike by railroad personnel c. The project manager is absent for an eight-week maternity leave d. A tropical storm affecting a project vendor's facility

25. Which choice is a common technique for graphically showing risk categories? a. Work breakdown structure b. Flowchart c. Decision tree d. Risk breakdown structure

Self-test answers

1. D: Monte Carlo analysis is a tool and technique of quantitative risks analysis.

2. A: The team transferred the majority portion of the risk to another party.

3. D: The formula for EMV is the risk probability multiplied by impact. 30% x $20,000 = $6,000

4. A: Fallback plans are related to specific risks and would be developed as part of Plan Risk Respones.

5. C: The goal of project risk management processes is to increase the probability and impact of positive events, and decrease the probability and impact of events adverse to the project.

6. D: Relative scales use designations like low, medium, and high. Linear scales are numeric with identical intervals between the designations (1,2,3, and so on), while non-linear scales have different intervals between the designations (1, 2, 4, 8, and 16).

7. A: The Delphi technique is a way to anonymously gather opinions and analyze the results without any bias as to who submitted the opinion.

8. A: Risk audits review the overall effectiveness of the risk management processes, so they are part of risk monitoring and control.

9. A: EMV is calculated by multiplying the risk probability by its impact. The contingency reserve is the sum of the EMV for each risk.

10. B: The responses for negative threats are avoid, mitigate, and transfer. Responses for both positive and negative risks are accept and contingent.

11. A: The original risk response resulted in a secondary risk. Secondary risks are those that arise out of activities for a risk response.

12. A: Assumptions are always sources of risk until they are absolutely proven to be true.

13. B: The risk register is populated with known risks during risk identification. Subsequent risk processes will expand on the data in the risk register.

14. B: The risk was mitigated, but was not completely avoided.

15. C: Residual risks are those in which no response strategy has been decided upon. They're low priority risks whose combination of probability and impact don't warrant detailed planning. Even if not explicitly decided as such, residual risks are in fact accepted.

16. C: The watchlist contains low-priority risks, and it is monitored to make sure that the probability or impact of low priority risks hasn't changed.

17. C: Risk data quality assessment, risk categorization, and risk urgency assessment are tools of qualitative risk analysis.

18. D: The risk management plan establishes the rating scale and criteria for determining risk probability and impact.

19. D: The question describes a risk owner. The risk manager works with the project manager in establishing and overseeing project risk management activities. The risk owner is the person who assists in determining the risk response and establishing contingency and fallback plans for a specific risk. The risk action owner is the person responsible for carrying out one or more planned risk response activities for a specific risk.

20. A: Sensitivity analysis helps determine what risks can have the most impact on project objectives or how the same risk can affect different objectives. A tornado diagram is one of the common ways to display the results from sensitivity analysis.

21. C: Three point estimates result in a continuous probability distribution.

22. B: The key to this question is knowing the difference between a risk and an issue. An issue is something that will definitively occur or has taken place while a risk is a known but uncertain future event. So this question is not a risk-based question, and the only appropriate answer is to document the issue on the issue log.

23. A: The risk register isn't populated with risks until the Identify Risks process, which occurs after initial planning for project risk management.

24. C: Force majeure events are long-term disruptions which can't be reasonably foreseen nor is there any reasonable action that can be done to prevent them. These are usually natural disasters, but can also include work stoppages, strikes, and riots.

25. D: The risk breakdown structure is a hierarchical display of risk categories. Its appearance is similar to the work breakdown structure.