Risk Management Planning Practice Questions
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Get ready to answer some risk management planning practice questions in this quiz. The questions are perfect for someone who wants to add to their knowledge on the topic. There are a lot of risks that come with going into different ventures or taking up projects successfully. The quiz will ensure that you know how to assess, manage, and avoid some of them. All the best to you with this quiz.
- 1.
Julia has just presented her risk management strategy to her project sponsor. The project sponsor is very happy with the strategy but has asked Julia to setup a Management Reserve as well. What type of project risks are handled by the Management Reserves?
- A.
Known risks
- B.
Unknown risks
- C.
Mitigated risks
- D.
Transferred risks
Correct Answer
B. Unknown risksExplanation
Management Reserves are set up to handle unknown risks. These are risks that have not been identified or assessed during the risk management process. By allocating a portion of the project budget as a Management Reserve, Julia can account for these unknown risks and have a contingency in place to address them if they arise. This shows that the project sponsor recognizes the importance of being prepared for unforeseen events and wants to ensure that there are resources available to handle them.Rate this question:
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- 2.
Anne is currently analyzing her project risks. She wishes to quickly assign relative probabilities to these risks in order to prioritize them. Which of the following processes assigns relative probabilities to the identified project risks?
- A.
Plan Risk Responses
- B.
Perform Quantitative Risk Analysis
- C.
Perform Qualitative Risk Analysis
- D.
Identify Risks
Correct Answer
C. Perform Qualitative Risk AnalysisExplanation
Performing Qualitative Risk Analysis is the process that assigns relative probabilities to the identified project risks. This process involves evaluating and prioritizing risks based on their likelihood and impact. It helps in understanding the overall risk exposure of the project and allows for effective risk response planning. By assessing risks qualitatively, Anne can quickly assign relative probabilities to prioritize them and focus on the most significant risks. Plan Risk Responses involves developing strategies to address the identified risks, Perform Quantitative Risk Analysis involves numerically analyzing the impact of risks, and Identify Risks is the initial step of identifying potential risks.Rate this question:
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- 3.
Carol is currently planning her project risk responses. There is a huge risk of cost variation due to some of the present economic conditions in the country. This situation cannot be avoided because Carol doesn’t have any control over it. In addition, she doesn’t have any control over influencing the probability or the impact of this risk. This is also not a type of risk that can be insured. What should Carol do in this situation?
- A.
Accept the risk
- B.
Mitigate the risk
- C.
Transfer the risk
- D.
Avoid the risk
Correct Answer
A. Accept the riskExplanation
In this situation, where Carol has no control over the risk of cost variation due to economic conditions, and cannot influence its probability or impact, and it cannot be insured, the best course of action would be to accept the risk. Accepting the risk means acknowledging that it exists and deciding not to take any specific action to mitigate, transfer, or avoid it. This is a reasonable approach when the risk is beyond one's control and the potential impact is manageable or acceptable.Rate this question:
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- 4.
Which of the following statements regarding Expected Monetary Value analysis (EMV) is incorrect?
- A.
It calculates a statistical average of the probable outcome of risk events.
- B.
It requires a risk-neutral approach.
- C.
It can be used in decision tree analysis.
- D.
It calculates the impact of risks that have already occurred.
Correct Answer
D. It calculates the impact of risks that have already occurred.Explanation
EMV analysis does not calculate the impact of risks that have already occurred. Instead, it calculates a statistical average of the probable outcome of future risk events. This analysis is based on the probability of each risk event occurring and the potential impact it would have on the project. EMV analysis is used to assess the potential value or cost associated with each decision or action in a decision tree analysis, and it does require a risk-neutral approach.Rate this question:
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- 5.
Risks that have already occurred are considered...
- A.
Damage
- B.
Solutions
- C.
Issues
- D.
None of these
Correct Answer
C. IssuesExplanation
Risks that have already occurred are considered issues. Issues are problems or challenges that have already happened and need to be addressed or resolved. In contrast, damage refers to the harm or destruction caused by risks, solutions are the actions taken to mitigate or prevent risks, and "None of these" is not applicable in this context.Rate this question:
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- 6.
George has identified his project risks. He now wants to determine which risks have the most significant impact. This will consist of analyzing the effects of various risks on project objectives by keeping all the uncertain elements at their baseline values. Which of the following tools can help George conduct this analysis?
- A.
Fishbone Diagram
- B.
Flowchart
- C.
Tornado Diagram
- D.
Pareto Chart
Correct Answer
C. Tornado DiagramExplanation
A Tornado Diagram can help George conduct this analysis. A Tornado Diagram is a visual tool that displays the relative importance of each risk factor on project objectives. It allows George to analyze the effects of various risks by keeping all uncertain elements at their baseline values. By using this diagram, George can identify which risks have the most significant impact on the project and prioritize them accordingly.Rate this question:
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- 7.
James has just finished documenting a list of his project risks. He now wants to analyze his company’s strengths and capabilities to deal with these risks. Which of the following techniques can help James determine these strengths and capabilities and analyze the organizational environment?
- A.
Expert Judgment
- B.
SWOT Analysis
- C.
Brainstorming
- D.
Checklist Analysis
Correct Answer
B. SWOT AnalysisExplanation
SWOT Analysis is a technique that can help James determine his company's strengths and capabilities and analyze the organizational environment. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. By conducting a SWOT analysis, James can identify the internal strengths and weaknesses of his company, as well as the external opportunities and threats it faces. This analysis will provide him with valuable insights into how well-equipped his company is to deal with the project risks he has documented.Rate this question:
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- 8.
SWOT means
- A.
Strengths, Weaknesses, Opportunities, and Troubles
- B.
Strategies, Weaknesses, Opportunities, and Threats
- C.
Strengths, Ways, Opportunities, and Threats
- D.
Strengths, Weaknesses, Opportunities, and Threats
Correct Answer
D. Strengths, Weaknesses, Opportunities, and ThreatsExplanation
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It is a strategic planning tool used to evaluate and analyze the internal and external factors that can impact the success of a project, business, or organization. Strengths and weaknesses refer to the internal factors, such as the organization's resources, capabilities, and limitations. Opportunities and threats, on the other hand, are external factors that can affect the organization, such as market trends, competition, and economic conditions. By identifying and analyzing these factors, organizations can develop strategies to capitalize on their strengths, address their weaknesses, take advantage of opportunities, and mitigate potential threats.Rate this question:
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- 9.
Which of the following statements regarding the Perform Qualitative Risk Analysis and the Perform Quantitative Risk Analysis processes is correct?
- A.
The Perform Quantitative Risk Analysis process assigns relative probabilities while the Perform Qualitative Risk Analysis process assigns numerical probabilities to the project risks.
- B.
The Perform Qualitative Risk Analysis process assigns relative probabilities while the Perform Quantitative Risk Analysis process assigns numerical probabilities to the project risks.
- C.
The Perform Qualitative Risk Analysis process is a mandatory process to be performed on every project, while the Perform Quantitative Risk Analysis process is an optional process.
- D.
The Perform Quantitative Risk Analysis process is a mandatory process to be performed on every project, while the Perform Qualitative Risk Analysis process is an optional process.
Correct Answer
B. The Perform Qualitative Risk Analysis process assigns relative probabilities while the Perform Quantitative Risk Analysis process assigns numerical probabilities to the project risks.Explanation
The Perform Qualitative Risk Analysis process assigns relative probabilities while the Perform Quantitative Risk Analysis process assigns numerical probabilities to the project risks. This means that in the qualitative analysis, risks are assessed based on their likelihood and impact using subjective scales such as high, medium, or low. In the quantitative analysis, risks are assessed using numerical values and statistical techniques to determine the probability of occurrence and the potential impact on project objectives.Rate this question:
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- 10.
Which of the following updates to the Risk Register are not performed during the Perform Qualitative Risk Analysis process?
- A.
Relative ranking of risks
- B.
Categorization of risks
- C.
List of risks for additional analysis
- D.
List of potential responses
Correct Answer
D. List of potential responsesExplanation
During the Perform Qualitative Risk Analysis process, the updates to the Risk Register that are not performed include the creation of a list of potential responses. This process focuses on assessing and prioritizing risks based on their probability and impact. It involves evaluating risks qualitatively to determine their relative ranking and categorizing them based on their nature. However, it does not involve generating a list of potential responses to address the identified risks. This task is typically performed in the Plan Risk Responses process, which follows the Perform Qualitative Risk Analysis process.Rate this question:
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Current Version
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Nov 16, 2023Quiz Edited by
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Jan 30, 2015Quiz Created by
Lingo_Bingo
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