Risk Management Q&A

1. 1 . A PM has created a contingency response that the cost performance index should be less than
0.80. The project has a budget at completion of $100,000 and is 35 percent complete - though the
project should be 50 percent complete. The project has spent $45000. What is the project's cost
performance index?
1.28
0.7
0.77
1,42
Answer: c) CPI=EV/AC. EV=100000*35%=35000. AC= 45000. CPI=35000/45000=0.77.
2. Consider the risk probability-impact matrix in the figure given below: If Risk B happens in
this project, how much will be left in the contingency reserve?
220000
-452500
It depends on the total budget of the project.
-232500
Answer: a) The total EMV comes to 452500 and if B happens then the left out is $220000.
3 . You are managing the project along with key stakeholders. One of the key requirement
from customer is their satisfaction and even the other stakeholders believe in this. As a
project manager what do you think or is your action about this point from risk management
point of view?
Achieving customer satisfaction is an assumption and should be documented in the project scope.
Achieving customer satisfaction is a subjective requirement and entails a high level of risk of being successfully
accomplished
Achieving customer satisfaction is a risk as the project manager cannot control how satisfied the customer will be with
the project deliverables.
Achieving customer satisfaction should always map to the quality requirements for the project.
Answer: b) Customer satisfaction differs so is subjective.

2. 4 . Which process performs the probability and impact analysis?
A risk probability-impact matrix
Quantitative risk analysis
Seven risk responses
Qualitative risk analysis
Answer: d) After the identification risk, one should carry out the qualitative risk analysis.
5 . You are working to complete the qualitative risk analysis for your project. During the
analysis you encourage the project team to begin the grouping of identified risks by common
causes. What is the primary advantage to group risks by common causes during qualitative
risk analysis?
It helps the project team realize the areas of the project most laden with risks.
It saves time by collecting the related resources, such as project team members, to analyze the risk events.
It can lead to developing effective risk responses.
It can lead to the creation of risk categories unique to each project.
Answer: c) It helps in categorization and carrying out effective risk management.
6 . The project team is in the process of developing risk responses. While dealing with a
particular risk, the team discover that it cannot be avoided and attempts to transfer or
mitigate the risk is unsuccessful. What the team should do?
Continue to investigate to find ways to transfer
Accept the risk
Reduce the project scope so that risk can be avoided
Continue investigating ways to reduce the impact of the risk.
Answer: b) Accept the risk, wait and watch.

3. 7 . You are working on a mobile cell phone project which calls for erecting towers. While
planning, you identified that there is a risk of erecting all the towers very late in the financial
year which will affect the revenue growth of the organization. You decide to approach the
competitors who already erected the towers and is in operation, to use their tower on
revenue sharing model. Which of the following response is being taken to overcome the
risk?
Mitigate
Share
Exploit
Enhance
Answer: b) The project manager is asking the other companies to partner and they can all share in the
benefits of it.
8 . Teaming agreement solution refers to which risk response?
Transference
Acceptance
Mitigation
Sharing
Answer: d) As we know join venture for example is sharing the risk and considered an opportunity for all
the parties.
9 . You are working with the project stakeholders on the qualitative risk analysis process in
your project. You have used all the tools to the qualitative risk analysis process in your
project. Which of the following techniques is NOT used as a tool in qualitative risk analysis
process?
Risk Urgency Assessment
Risk Categorization
Risk Reassessment
Risk Data Quality Assessment
Answer: c) Risk reassessment is used in control risk process.

4. 10 . You are using the applications of IRGC model to understand and manage the rising of
the overall risks that have impacts on the economy and society. One of your team member
wants to know what is the need to use IRGC. What will be your reply?
IRGC addresses questions such as the understanding of the secondary impacts of a risk.
IRGC models aim at building robust, integrative inter-disciplinary governance models for emerging and existing risks.
IRGC addresses the development of resilience and the capacity of organizations and people to face unavoidable
risks.
IRGC is both a concept and a tool.
Answer: b) IRGC which is International Risk Governance Council model supports in building governance
for the risk management. Please refer to www. Irgc. Org.
11 . You are the project manager of your organization. Your organization will receive a
bonus if the project finishes before Christmas . The bonus amount is about $700,000. After
assessing the situation considering the trend and the forecast, you realize that by spending
about $200,000 with crashing technique, the goal can be achieved. What is the response
you are taking here?
Crashing can be a type of the enhancing risk response.
Crashing can be considered transference because of the $275,000 is actually paid from the bonus, which is paid by
the project customer.
Crashing can be a type of the exploit risk response.
Crashing is the addition of labor, not a risk response.
Answer: a) It's motivation for the team and which results in enhancing the opportunity.
12 . You identified a supplier who can create stained glass windows for 1,000 window units
in a construction project. The supplier is an artist who works by himself, but creates windows
for several companies throughout the United States. Management reviews the proposal to
use this supplier and while they agree that the supplier is talented, they do not think the
artist can fulfill the 1,000 window units in time for the project's deadline. Management asked
you to find a supplier who can fulfill the completion of the windows by the proposed date in
the schedule. What risk response has management asked you to implement?
Mitigation
Acceptance
Avoidance
Transference
Answer: a) Mitigation is used to reduce the impact on the project schedule.

5. 13 . While identifying risks for a new construction project, you discover that a chemical you
are using on your building cannot be applied in rainy conditions. You also learn that your
project will be ready for the chemical application around the time when most of the rainfall
happens in that part of the country. Since the project can't be delayed until after the rainy
season and you need to make sure the building gets the chemical coating. You decide that
your team will just have to work around the rain. Which strategy is this an example of?
Mitigate
Exploit
Accept
Transfer
Answer: c) This is an example of accepting a risk. The team can't do anything about the weather, so the
project manager has accepted the fact that they could end up being delayed by it.
14 . You are reviewing the risk register for your project. The risk register provides
information to you, the project manager and to the project team during the risk response
planning. All of the following are included in the risk register except for which option?
Network diagram analysis of critical path activities
Symptoms and warning signs of risks
List of potential risk responses
Trends in qualitative risk analysis results
Answer: a) Schedule management plan provides the information about network diagram.
15 . Along with your team members you are facilitating about risk response analysis along
with understanding of each response from the team point of view. Which of the following
activities are you carrying out?
Risk audits
Stakeholder analysis as the project team is a stakeholder
Risk identification with the project team
Risk analysis
Answer: a) Risk Audits helps in evaluate the effectiveness of risk response and the overall risk
management.

6. 16 . Decision tree can be classified as
Expected monetary value
Probabilistic outcome method
Earned value method
Modeling and simulation
Answer: b) The decision tree is a diagram describing different decisions under consideration and the
impact on the project of choosing one over the another.
17 . In which process does the tool Ishikawa or cause and effect diagram tool used?
Identify Risks
Qualitative Analysis
Quality Control
Plan Risk Responses
Answer: a) Don't assume that every time you see a fishbone diagram the question is talking about Quality
Control. Diagramming Techniques (including Ishikawa diagrams and Flowcharts) are a tool of the identify
Risks process. You use them to find the root cause of defects in Quality Management processes but they
can also be useful in finding the risks that can lead to trouble in Risk Management.
18 . The project team is in the process of performing qualitative risk analysis. All of the
following updates will be included within the risk register updates except:
List of risks requiring additional analysis
List of low priority risks
Probability of achieving time objectives
Risks grouped by categories
Answer: c) Probability of time objectives is included during plan risk response process.
19 . Which of the following will not increase the quality risk?
Crashing
Overlapping
Fast tracking
Concurrent Engineering
Answer: a) Crashing adds to the cost risk.

7. 20 . You and the project team have identified the risk that the project may not complete on
time, as required by the management, due to the creation of the user guide for the software
you're creating. You have elected to hire an external writer in order to satisfy the
requirements and to alleviate the risk event. What type of risk response have you elected to
use in this instance?
Avoidance
Exploiting
Transference
Sharing
Answer: c) Transference is used to transfer the activities which is not of self expertise.
21 . You are the project manager for your company and a new change request has been
approved for your project. This change request, however, has introduced several new risks
to the project. You have communicated these risk events and the project stakeholders
understand the possible effects these risks could have on your project. You are elected to
create a mitigation response for the identified risk events. Where will you record the
mitigation response?
Risk register
Risk log
Risk management plan
Project management plan
Answer: a) The risk register should update with risk response.
22 . You are about to perform qualitative risk analysis on the identified risks within your
project. Which one of the following will NOT help you to perform this project management
activity?
Scope baseline
Risk management plan
Risk register
Stakeholder register
Answer: d) Stakeholder register is the output of identify stakeholder process.

8. 23 . Which risk response indicates the allocation of ownership of opportunity to third party?
Share
Exploit
Enhance
Venture
Answer: a) Share is joint ownership.
24 . Once the risks have been identified on the project, the next step is to manage the risks.
Of the following, which is not a suitable way of managing the risks?
By using existing assets
By contingency planning
By investing in new resources
By Brainstorming
Answer: d) Brainstorming is a tool and technique for risk identification. All of the other options are ways of
managing the risks. Existing assets may involve improvements to existing methods and systems,
changes in responsibility, etc. Contingency planning may help you in minimizing the effect, if it happens.
Investing in new resources may help in reducing or insuring you against risk.
25 . Communication management plan contains all of the following except:
Risk reporting formats
Escalation process of issues
Communication related terms
Frequency of communication
Answer: a) Risk reporting format is included as part of risk management plan.

9. 26 . What are the strategies for dealing with positive risks?
Avoid, mitigate, transfer, accept
Transfer, mitigate, avoid, exploit
Exploit, share, enhance, accept
Mitigate, enhance, exploit, accept
Answer: c) Positive risks are opportunities that could happen on your project. The strategies for dealing
with them are all about making sure that your project is in a position to take advantage of them or at least
share in them with other projects if possible.
27 . The project has a budget of $567,000 and is schedule to last for three years. You want
to examine the risk events to determine which risk events have the most potential impact on
the project. Which modeling technique can help you to accomplish this goal?
Expected monetary value
Sensitivity analysis
Quantitative risk analysis
Modeling and simulation
Answer: b) Sensitivity analysis determines which is having most impact with risk.
28 . All of the following statements are true regarding risk events except which one? Choose
the least correct answer.
Project risks are uncertain events.
If risks occur, they can have a positive or negative effect on project objectives.
Unknown risks are threats to the project objectives, and nothing can be done to plan for them.
Risks that have more perceived rewards to the organization than the consequences of the risk should be accepted
Answer: c) Unknown risks might be threats or opportunities to the project, and the project manager
should set aside contingency reserves to deal with them.

10. 29 . In addition to monitoring and controlling the project risks for their status and information,
the risk monitoring and controlling process accomplishes four key things for a project. Which
one of the following is NOT a determination that is made by the risk monitoring and
controlling process?
Determines if the project assumptions are still valid
Determines if the risk management policies and procedures are being followed
Determines if the risk contingency reserves should be modified so that it is aligned with the current risk assessment
Determines if the project constraints are still valid
Answer: d) Choices A, B and C are the tools and techniques.
30 . All of the following are tools and techniques for Control Risks except:
Earned value analysis
Project risk audits
Technical performance measurements
Exploitation
Answer: d) Exploit is a strategy for opportunities under the tools and techniques of the Plan Risk
Responses process. It is associated with managing opportunity or risks that may have a positive impact
on a project..
31 . You are the project manager of a project that has recently finished the final project
deliverables. The project customer has signed off on the project deliverable and you have a
few administrative closure activities to complete. In the project, there were several large
risks that could have wrecked the project but you and your project team found some creative
methods to resolve the risks without affecting the project costs or project end date. What
should you do with the risk responses identified during the project's monitoring and
controlling process?
Include the risk response in the project risk management plan.
Include the responses in the project management plan.
Nothing. The risk responses are included in the project's risk register already.
Include the risk responses in the organization's lessons learned database.
Answer: d) Lessons learnt is one of the important organization assets.

11. 32 . As a project manager you decide to create an issue log which captures issue
description, owner, and the target date for issue closure. All of the following are common
examples of issues in the project except?
Differences in Opinion
Probable delay in the next delivery
Pending root cause analysis
Delay in receiving feedback from the customer
Answer: b) Probable delay in the next delivery represents a project risk and is not an issue as the event is
uncertain. This may or may not happen in future.
33 . Which diagramming technique are you using as a part of the risk identification process
that helps in finding the causes of the issues?
Cause and effect diagrams
System or process flow charts
Predecessor and successor diagramming
Influence diagrams
Answer: a) Cause and effect diagram used to find the causes of the defects.
34 . Which process addresses if any changes are to be implemented after risk analysis, the
same is carried in controlled manner?
Risk monitoring and control
Scope change control
Integrated change control
Configuration management
Answer: c) Change Control Board addresses all the changes through integrated change control process.

12. 35 . As a project manager you are working with stakeholder to assess the qualitative and
quantitative risk analysis. What is the best course of action when dealing with bias and
attitude of the stakeholders considering risk management?
Evaluate and document the bias towards the risk events
Evaluate the bias through SWOT for true analysis of the risk events
Document the bias for the risk events and communicate the bias with management
Evaluate the bias towards the risk events and correct the assessment accordingly
Answer: d) There should not be any bias during the risk management.
36 . All are inputs to Plan stakeholder management except for:
Organization process assets
Stakeholder register
Risk Register
Stakeholder management strategy
Answer: c) Risk register is not an input.
37 . In a project there are certain enterprise environmental factors that require PM to use
modeling and simulation techniques to predict the likelihood of achieving cost and schedule
objectives in the project. PM is using a technique for which the cost estimates are chosen at
random for each iteration of the analysis, such as pessimistic, most likely, and worst-case
scenarios. What type of analysis is PM using in this project?
Quantitative analysis
Qualitative analysis
Risk distribution
Monte Carlo Analysis
Answer: d) Monte Carlo analysis helps in carrying out quantitative risk analysis.

13. 38 . You are in the middle of the project and one of the key stakeholder comes up with a
change request. By looking into the change request, you realize that there will be an impact
to the project from the schedule perspective, if this is implemented and also sure that
because of the business advantage by this implementing this change, CCB is going to
approve it. So considering the impact what is your first action?
Mitigate the risk by asking a team member to get familiar with the feature of the software that might be changed
Schedule a meeting with the stakeholder to discuss the risk
Add the risk to the risk register and gather information about its probability and impact
Add the risk to the issue log and revisit it when there is more information
Answer: c) In the risk register enter the details and then go for the further analysis.
39 . Which of the following plan directs the process of quantitative risk analysis?
Risk analysis plan
Staffing management plan
Human resource management plan
Risk management plan
Answer: d) Risk management plan guides the risk management.
40 . A project manager working on a construction project identifies a risk of a heavy storm in
the coming months which might affect the construction activity. However, he doesn't have
any reliable information on the weather forecast or the severity of the storm. In this case,
what is the best project manager can do?
Capture the Risk in the Risk Register
Ignore the Risk as nothing can be done to avoid it
Actively accept the risk and allocate time and cost reserve in contingency fund
Proceed with Risk Response Strategy to counter the Risk
Answer: c) In this situation the project manager has no information on the timing, anticipated frequency,
or impact of the expected rough weather. Option (d) will not give any valuable information. The best
option is (c) to accept the risk, but plan a contingency reserve in terms of cost and time in case the risk
occurs. Option (a) and (b) are passive approach and are not recommended for a good project manager
who should be always proactive in his approach towards risk management.

14. 41 . You and project team have agreed that if the vendor is late by more than ten days they
will cancel the order and hire another Company to fulfill the order. The new Company can
guarantee orders within three days, but the costs of their products are significantly more
expensive than the current vendor. What type of a response strategy is this?
Internal risk management strategy
Contingent response strategy
External risk response
Expert judgment
Answer: b) Contingent response is plan B.
42 . All of the following are included in risk management plan except
Contingency plan
Approach to perform risk management activities
Risk categories
Estimated costs for risk activities
Answer: a) Contingency plan will be done while carrying out the risk response process.
43 . You are managing a project which is very critical for the organization. But the key
stakeholders are not attending the status and risk management meeting. What is this
attributed as?
Risk events
Risk triggers
Primary risks
Residual risks
Answer: b) A Risk trigger is referred to as a symptom of an impending risk event and signals the project
manager to take action before the event occurs. Risk events are actual occurrences of an identified risk
event. Primary and secondary risks are risk events identified by the project team or key stakeholders..

15. 44 . You are the project manager managing a big team. During the risk management you
carried out qualitative risk analysis and started quantitative risk analysis. One of the team
members asked why you are carrying out quantitative risk analysis too? Which one of the
following statements best defines what quantitative risk analysis is?
Quantitative risk analysis is the process of numerically analyzing the effect of identified risks on overall project
objectives.
Quantitative risk analysis is the planning and quantification of risk responses based on probability and impact of each
risk event.
Quantitative risk analysis is the review of the risk events with the high probability and the highest impact on the
project objectives.
Quantitative risk analysis is the process of prioritizing risks for further analysis or action by assessing and combining
their probability of occurrence and impact.
Answer: a) The definition of quantitative risk analysis is that it is the process of numerically analyzing the
effect of identified risks on overall project objectives..
45 . You added extra features to the project and this has introduced new risks to the project
work. The project manager elects to remove the features that you added. The process of
removing the extra features to remove the risks is called?
Preventive action
Corrective action
Scope creep
Defect repair
Answer: a) Preventive action is to reduce and completely stop something negative that is happening to
the project.
46 . You and your project team are just starting the risk identification activities for a project
that is scheduled to last for 18 months. Your project team has already identified a long list of
risks that need to be analyzed. How often should you and the project team do risk
identification?
It depends on how many risks are initially identified
At least once per month
Identify risks is an iterative process
Several times until the project moves into execution
Answer: c) Risk identification should happen throughout the project.

16. 47 . For the risk identification process, we are using Ishikawa diagram. All of the following
statements are true except for:
Ishikawa diagrams are also called cause-and-effect diagrams.
Ishikawa diagrams are also called fishbone diagrams.
Ishikawa diagrams are a tool and technique of this process.
Ishikawa diagrams show the steps needed to identify the risk.
Answer: d) Cause-and-effect diagrams-also called Ishikawa or fishbone diagrams-show the relationship
between the effects of problems and their causes. Kaoru Ishikawa developed cause and - effect
diagrams.
48 . You are the project manager for a new project using a technology that has recently
been released. There is relatively little information available about this technology. Initial
testing of the technology looks promising, but while tracking the project, you discovered that
there's still uncertainty as to its longevity and reliability. You want to consider the technology
factors a risk for your project. Where should you document the risks associated with this
technology so that you can track the risk status and responses?
Risk register
Risk low-level watch list
Project scope statement
Project charter
Answer: a) Risk register capture all the risks irrespective of its nature.
49 . What is a risk owner?
The person who monitors the watchlist that contains the risk.
The person who meets with stakeholders to explain the risk.
The person who makes a risk happen.
The person who is responsible for the response plan for the risk.
Answer: d) Every risk should have a risk owner listed in the register. That person is responsible for
keeping the response plan up to date and make sure the right actions are taken if the risk does occur.

17. 50 . You have been actively communicating and working with the project stakeholders. One
of the outputs of the manage stakeholder expectations process can actually create new risk
events in the project. Which output of the manage stakeholder expectations process create
risks?
Project document updates
Change requests
Organizational process assets updates
Project management plan updates
Answer: b) Change requests can impact other objectives in the project and can result in risk.
51 . Based on the enterprise environmental factors and the risk attitude of the stakeholders
within the organization, what can be determined?
Risk attitude can affect the measurement of probability and impact.
Risk attitude can establish a stakeholder's influence over project decisions.
Risk attitude identifies stakeholders that are hygiene seekers or motivation seekers.
Risk attitude establishes stakeholders as positive or negative stakeholders.
Answer: a) Risk appetite explains risk attitude which in turns provides probability and impact. The attitude
can be organization and/or the individual.
52 . Which risk analysis tool is used to model your risks on a computer to show random
probabilities?
Computerized risk audit
Monte Carlo analysis
EMV analysis
Delphi technique
Answer: b) Monte Carlo analysis is a way of seeing what could happen to your project if probability and
impact values changed randomly.

18. 53 . You have completed the risk analysis processes for the risk events. You and the project
team have created risk responses for most of the identified project risks. Now, you would
like to assign risk owners to the events. Which risk events should have risk response
owners?
Only the risks with a high risk rating
Each agreed-to and funded risk response should have a risk response owner
Each risk that has a risk response should have a risk response owner
Only the risk events that are considered a negative risk event with a high risk rating
Answer: b) Once the risk response decided, the risk owner should be identified.
54 . Which of the following is not a communication method while addressing stakeholders
and communicating with them?
Interactive method
Push method
Pull Method
Direct method
Answer: d) The three types of communication methods are interactive, push and pull methods.
55 . You are working with the project team members and two subject matter experts to
assess the identified risk events in the project. Which of the following approaches is the best
to assess the risk events in the project?
Determination of the true cost of the risk event
Probability and Impact Matrix
Root cause analysis
Interviews or meetings
Answer: d) Interaction with SME's is the best option to assess the risk events.

19. 56 . Which of the following technique helps in finding any risk associated with respect to
schedule?
Project network diagrams
Process flow charts
Ishikawa diagrams
Influence diagrams
Answer: a) Network diagram shows the risk if there is any delay in the activities which are in the critical
path.
57 . What is the significance of earned value technique from the risk management
perspective when carrying out the variance and trend analysis as part of monitoring and
controlling?
You can determine a true project completion date.
You can track the cost and schedule variances.
You can review quality performance on baselines.
You can forecast deviation of the project cost and schedule for completion targets.
Answer: d) EVM provides variance, forecasting and performance measurement of the project.
58 . Your project has several risks that may cause serious financial impact, if they happen.
You have studied the risk events and made some potential risk responses for the risk events
but management wants you to do more. They'd like you to create a type of chart that
identified the risk probability and impact with a financial amount for each risk event. What is
the likely outcome of creating this type of chart?
Risk response
Quantitative analysis
Contingency reserve
Risk response plan
Answer: c) Contingency reserve will be considered after the analysis.

20. 59 . The risk transference is referred to the transfer of risks to a third party, usually for a fee,
it creates a contractual relationship for the third party to manage the risk on behalf of the
performing organization. Which one of the following is NOT an example of the transference
risk response?
Use of insurance
Warranties
Life cycle costing
Performance bonds
Answer: c) Life cycle costing is not a contractual.
60 . The --------- is the risk or danger of an action or an event, a method or a (technical)
process that still conceives these dangers even if all theoretically possible safety measures
would be applied.
Residual risk
Secondary risk
Primary risk
Pure risk
Answer: a) residual risk is the risk which remains after the all the responses implemented.
61 . Management has asked you to perform a risk audit and report the results. A project
team member asks you what a risk audit is. What do you tell the team member?
A risk audit is a review of all the risks that have yet to occur and what their probability of happening are.
A risk audit is a review of the effectiveness of the risk responses in dealing with identified risks and their root causes,
as well as the effectiveness of the risk management process.
A risk audit is a review of all the risk probability and impact for the risks, which are still present in the project but which
have not yet occurred
A risk audit is an audit of all the risks that have occurred in the project and what their true impact on cost and time
has been.
Answer: b) Risk audit helps in overall effective risk management.

21. 62 . You are selecting a project for your organization from different customers. You have
delivered projects for these customers earlier. From the previous history data you know that
after delivering the projects, the payment system is not good in spite of the delivery as per
the scope requirements. You feel that this can be a risk. What is the best you can do?
Transference
Mitigation
Avoidance
Acceptance
Answer: c) The best thing that you can do with a risk is avoid it. Sometimes avoiding one risk can lead to
another risk like not getting any projects. But one has to balance.
63 . A project manager knows that managing the expectations of stakeholders helps to
increase the probability of project success by ensuring that stakeholders understand the
project benefits and risks. For this process, he could use all of the following tools and
techniques except?
Issue Log
Communication methods
Active listening
Writing skills
Answer: a) An issue log is an input to the process Manage Stakeholder Expectations. All of the others are
tools and techniques for the process.
64 . A project team is in the process of risk tracking and control. The risk control action
defined by the mitigation and contingency plans is being implemented in accordance with
the details of those plans. Who is responsible for implementing these actions?
Project Manager
Project Team
Risk Owner
Risk Manager
Answer: c) The risk owner for that particular risk is responsible for implementing the actions defined by
mitigation and contingency plan in risk management. A risk owner for a risk is identified during the
planning stage of risk management and he helps to assess the risk and produce probability and impact
information. He also develops risk mitigation and contingency plans, provides status data for respective
risk issues and assists in evaluating risk control action effectiveness. The risk owner also documents
threshold criteria of high and medium risks and supports the identification of new risks.

22. 65 . Based on the information in the table below, what amount would you need to include in
your risk contingency fund?
12000
5000
17000
7000
Answer: d) After EMV calculation, $7000 is required as contingency fund.
66 . Which of the following is the output of qualitative analysis process?
Probability of reaching project objectives
Project document updates
Risk response
Risk contingency reserve
Answer: b) The output of qualitative risk analysis is project document update with numerically assigning
values to the project objectives about overall impact.
67 . During execution, a major problem occurred that was not included in the risk response
plan. What should you do FIRST?
Create a workaround
Re-evaluate the risk identification process
Look for any unexpected effects of the problem
Tell management
Answer: a) Work around is the immediate solution and may not be permanent solution.

23. 68 . Risk related contractual decisions is used when created in which of the following plans?
Risk Register
Procurement management plan
Risk Management Plan
Stakeholder register
Answer: b) Contract which is the input for procurement management plan.
69 . The project manager has just found an unidentified risk which requires workaround. The
project manager is working for weak matrix organization. Who approves this workaround?
Functional Manager
Customer
Project Manager
Sponsor
Answer: a) In the weak matrix the FM is having highest authority.
70 . Which of the following risk responses guide that the project plan will not be changed to
deal with the risk?
Exploitation
Transference
Acceptance
Mitigation
Answer: c) Acceptance is the response in which no action will be taken. Based on the opportunity or
threat, the other responses will be considered.
71 . What will you need as inputs for the qualitative risk analysis of the project in this
scenario?
Qualitative risk analysis does not happen through the project manager in a functional structure.
You will need the risk register, risk management plan, scope baseline, and any relevant organizational process
assets.
You will need the risk register, risk management plan, outputs of qualitative risk analysis, and any relevant
organizational process assets.
You will need the risk register, risk management plan, permission from the functional manager, and any relevant
organizational process assets.
Answer: b) The listed one are inputs. Please refer to PMBOK.

24. 72 . On which of the following processes does The Project Risk Management knowledge
area focuses?
Quantitative Risk Analysis
Risk Monitoring and Control
Potential Risk Monitoring
Risk Management Planning
Answer: c) Except for C rest of them are processes of risk management.
73 . You and the project team are assessing the risk events and creating a probability and
impact matrix for the identified risks. Which one of the following statements best describes
the requirements for the data type used in qualitative risk analysis?
A qualitative risk analysis requires fast and simple data to complete the analysis.
A qualitative risk analysis requires accurate and unbiased data if it is to be credible.
A qualitative risk analysis encourages biased data to reveal risk tolerances.
A qualitative risk analysis required unbiased stakeholders with biased risk tolerances.
Answer: b) Any analysis should be accurate and unbiased and should be from the project interest.
74 . Which is the best technique to identify the risk in a project which provides four different
perspective?
Root cause analysis
SWOT analysis
Influence diagramming techniques
Assumptions analysis
Answer: b) Strength, weakness, opportunity and threat of the project and organization which helps in
identification of risks.
75 . You have declined a proposed change request because of the risk associated with it.
Where should the declined change request be documented and stored?
Change request log
Lessons learned
Project archives
Project document updates
Answer: a) The change request log should carry the outcome of change request.

25. 76 . Project manager wants to apply risk rating rule. Which of the following provides the
same information?
Risk management plan
Organizational process assets
Enterprise environmental factors
Risk probability and impact matrix
Answer: b) Risk ratings like low, medium, high definitions can be obtained from OPA.
77 . In which process do you create the Risk Breakdown Structure?
Identify Risks
Plan Risk Responses
Perform Qualitative Analysis
Plan Risk Management
Answer: d) The RBS is part of the Risk Management Plan. It's structured very similarly to an WBS. The
RBS helps you to see how risks fit into categories so you can organize your risk analysis and response
planning.
78 . You are working with project team to plan the risk responses for their project. A project
team member, does not understand the process that you are using to plan the risk
responses. Which approach is the preferred method to address project risks and the risk
responses?
Risks in the project should be addressed by their probability for creating risk responses.
Risks in the project should be addressed by the organization's risk tolerance for creating risk responses.
Risks in the project should be addressed by their impact for creating risk responses.
Risks in the project should be addressed by their priority for creating risk responses.
Answer: d) The risk addressing happens based on the priority.

26. 79 . You are budgeting for a project and while interacting with one of the stakeholders, he
provides a statement saying that inflate the budget about 25% and asks you to consider the
pessimistic estimation. You understood from this conversation that he is referring to the risk.
But as a project manager what is the best you can do?
Add the 30% as a lump sum contingency fund to handle project risks
Add the 30% to your cost estimate by spreading it evenly across all project tasks
Create one cost baseline for budget allocation and a second one for the actual project plan
Ask for information on risks that would cause your estimate to be too small
Answer: d) Instead of taking open statement as it, go to the detailing of risk that could make you to
estimate which may result in lessor additional amount of the budget.
80 . Which of the following is the output of control risk process?
Quantitative risk analysis
Risk audits
Change request
Qualitative risk analysis
Answer: c) Change request will be the output of monitoring and control risk.
81 . You have identified the risk and carried out the risk analysis. What should be the next
process from risk management point of view?
Qualitative risk analysis
Control risk
Risk identification
Quantitative risk analysis
Answer: b) Control risk which is monitoring and controlling process groups takes care of it.
82 . You are the project manager of a construction project. You have completed the risk
response planning with your project team and ready to update the risk register to reflect the
risk response. Which of the following statements best describes the level of detail you
should include with the risk responses which has been created?
The level of detail is set by historical information.
The level of detail should correspond with the priority of the risk.
The level of detail must define exactly the risk response for each identified risk.
The level of detail is set of project risk governance.
Answer: c) Change request will be the output of monitoring and control risk.

27. 83 . You are a project manager working on a software development project. You have
developed the risk management plan, identified risks, and determined risk responses for the
risks. One of the risks you identified occurs, and you implement the response for that risk.
Then, another risk occurs as a result of the response you implemented. What type of risk is
this called?
Trigger risk
Residual risk
Secondary risk
Mitigated risk
Answer: c) Secondary risks occur as a result of the implementation of a response to another risk.
84 . You are determining which risks can affect the project. Which of the following are the
inputs to the identify risks process that you will use to accomplish the task? Each correct
answer represents a complete solution. Choose that will not apply.
Scope baseline
Activity cost estimates
Risk register
Risk management plan
Answer: c) Risk register is the output.
85 . You are working with the project stakeholders to begin the qualitative risk analysis
process. You will need all of the following as inputs to the qualitative risk analysis process
except for which one?
Stakeholder register
Project scope statement
Risk management plan
Risk register
Answer: a) Stakeholder register is the output of identify stakeholder process.
86 . Which of the following option is true regarding stakeholder engagement level?
Possessive, resistant, neutral, supportive and leading
Unaware, resistant, neutral, supportive and leading
Unaware, resistant, natural, supportive and leading
Unaware, resistant, neutral, supportive and mentor
Answer: b) Unaware, resistant, neutral, supportive and leading are the different stakeholder levels

28. 87 . As a project manager you are collecting information on risks secretly. Which of the
following techniques, you are using?
Brainstorming
Delphi Technique
Interviews
SWOT Analysis
Answer: b) The Delphi technique is a way to get opinions and ideas from experts. This is a technique that
uses a facilitator who uses questionnaires to ask experts about important project risks. They take those
answers and circulate them - but each expert is kept anonymous so they can give honest feedback..
88 . You have a list of risks in the risk register. While reassessing the list of risk, you come
to the conclusion that some of the risk will not materialize. What would you do with these
risks?
Add the risks to the risk register
Add the risks to a low-priority watchlist
Close the outdated risks
Add the risk to the issues log
Answer: c) So, the risk is coming down. Close the one which is not happening.
89 . What is the other name for positive risks from the risk management books?
Benefits
Opportunities
Ancillary constituent components
Contingency risks
Answer: b) When the risk is positive, it is an opportunity.

29. 90 . You are the project manager on an industrial design project. You found a pattern of
defects occurring in all projects over the past few years and think there might be a problem
in the process the company is using. You start using Ishikawa diagrams to come up with the
root cause for this trend over projects so that you can make recommendations for process
changes to avoid this problem in the future. Which process are you doing?
Perform Quality Planning
Perform Quality Assurance
Perform Quality Control
Qualitative Risk Analysis
Answer: b) He is doing root-cause analysis on process problems, that's Quality Assurance. Remember,
Quality control is when you are trying to find problems in your work products through inspection. Quality
Assurance is when you are looking at the way your process affects the quality of the work you are doing..
91 . Monte Carlo simulation modeling is used for the developing the schedule and coming
up with budget for the project. For the risk management under which process is it used?
Risk Response Planning
Quantitative Risk Analysis
Risk Identification
Qualitative Risk Analysis
Answer: b) Monte Carlo analysis is a modeling and simulation technique that is a tool and technique of
the Quantitative Risk Analysis process.
92 . PM, the project team, and the key project stakeholders have completed a round of
qualitative risk analysis. PM needs to update the risk register with his findings so that he can
communicate the risk results to the project stakeholders including management. Expect for
which one will PM need to update all of the following information?
Prioritized list of quantified risks
Watchlist of low-priority risks
Trends in qualitative risk analysis
Risks grouped by categories
Answer: a) Prioritization happens during the beginning of qualitative risk analysis.

30. 93 . As a part of Control risk process, the project manager should update the risk register
with information on risk reassessment, risk audits, and periodic risk reviews. What else can
be updated in the risk register?
Actual costs and schedule delays of risk events.
Actual outcomes of risk management duties by the project team.
Actual cost of risk events.
Actual outcomes of the project's risks and of the risk responses.
Answer: d) The outcome which can impact the project objectives and the risk response to overcome.
94 . Your team has utilized all of the appropriate tools and techniques for responding to
identified project risks and has discovered that some risks have been reduced in impact but
remain a potential threat. These risks require further monitoring and are referred to as:
Secondary risks
Primary risks
Cumulative risks
Residual risks
Answer: d) Residual risks are included in the outputs of the Plan Risk Responses process and are
expected to remain as threats. Their probability and impact have been reduced through mitigation.
Primary risks are included in the initial risk identification process are generally most obvious. Secondary
risks are those risks that result from the decisions about how to manage primary risks. Cumulative risk is
a combination or collective expected value of the effect of multiple risks.
95 . You are the project manager of a large, high-profile project in your organization. You
have realized that politics within your company may affect the true identification of risk
events within the project. You decide that you'd like to use a method to identify risk events
through an anonymous process. Which one of the following risk events will allow you to
collect and distribute risk information without the stakeholders knowing what other
stakeholders are communicating about the project risk events ?
Surveys
Monte Carlo Technique
Checklist analysis
Delphi Technique
Answer: d) Delphi technique is used to identify and manage risks in an anonymous way in such a political
environment.

31. 96 . All of the following statements are true regarding risks except for which one?
Risks might be threats to the objectives of the project.
Risks are certain events that may be threats or opportunities to the objectives of the project.
Risks might be opportunities to the objectives of the project.
Risks have causes and consequences.
Answer: b) Risks are uncertain events that may be threats or opportunities to the objectives of the
project..
97 . You are working on a project. A risk is identified because you don't have expertize to
carry out the activity. You decided to outsource it, but the supplier is asking for the price
which exceeds the budget. What is this risk called?
Internal
Secondary risk
Pure risk
Transference
Answer: b) Secondary risk is nothing but risk which arises out of primary risk.
98 . Your current project has 75 internal stakeholders and 245 external stakeholders. Many
of the risks within your project will only affect the internal stakeholders, but several of the
identified risk events will affect the external stakeholders. Management would like to know
the total number of communication channels in the project. How many communication
channels exist in this project?
245
51040
102080
320
Answer: b) Use the formula n(n-1)/2= 320(319)/2=51040.

32. 99 . You have just been appointed project manager for a new telecommunications project.
There appear to be many risks on this project, but no one has evaluated them to assess the
range of possible project outcomes. What needs to be done?
Risk identification
Risk quantification
Risk response planning
Risk monitoring and control
Answer: a) Risk identification to minimize missing out any unidentified risk.
100 . Which of the following techniques examine the degree to which the organizational
strengths offset opportunity and threat while looking into risk?
SWOT Analysis
Expert Judgment
Delphi
Brainstorming
Answer: a) Strength, Weakness, opportunity and Threat analysis provides the organization assets.
101 . You are the project manager of a new project that uses newly released technology and
there's relatively little information about the technology. Though the initial testing looks
promising, there's still uncertainty regarding the reliability of the technology. You need to
document this aspect of technology risk. Which of the following documents would she use to
document the risk, so that she can track and respond to the risk?
Project Charter
Project Scope Statement
Risk Management Plan
Risk Register
Answer: d) Risk register documents description, category, response, probability, impact, etc.

33. 102 . You are actively communicating and working with the project stakeholders. One of the
outputs of the Manage Stakeholder Expectations process can create new risks for the
project. Which output of the Manage Stakeholder Expectations process can create risks?
Change Requests
Project Document Updates
Project Management Plan Updates
Process Assets Updates
Answer: a) Change request in any one parameter may increases impact on other parameters of the
project and may result in uncertainty.
103 . You would like to utilize sensitivity analysis in your project, but the management does
not understand how this will be displayed. What type of chart is usually used with sensitivity
analysis to show the relative effect of risks on the project?
Ishikawa chart
Force field analysis chart
GERT Chart
Tornado diagram
Answer: d) Tornado diagram is a horizontal bar chart starts with high and then descends to low which
looks like tornado.
104 . You are managing a construction project. During your risk identification interviews you
learn that there has been a string of construction site thefts over the past few months in the
area where you will be building your project. The team agrees that it's unlikely people will be
able to steal from your site. Even if thieves could get around your security, it's even more
unlikely that your project will lose a significant amount of material if a theft does occur. You
decide to monitor the risk from time to time to be sure that it continues to have a low
probability and impact. Where do you record the risk so that you don't lose track of it?
In a trigger
On a watchlist
In the Probability and Impact Matrix
In the Monte Carlo analysis report
Answer: b) A watchlist is where you keep risks that don't have a high enough probability or impact to
make it into the risk register but still need to be monitored. By recording the risk in a watchlist, you will
have a reminder to check to be sure that circumstances haven't changed as your project goes on. That
should give you enough time to come up with a risk response strategy if circumstances change as time
goes on.

34. 105 . You are the project manager working with your project team and other key
stakeholders to identify the risks within the project. You are currently aiming to create a
comprehensive list of project risks. For that you are using a facilitator to help generate ideas
about project risks. What risk identification method is the project manager likely to use?
Brainstorming
Delphi Techniques
Checklist analysis
Expert judgment
Answer: a) Brainstorming is the most commonly used technique to identify the risk.
106 . What is the reason behind updating work breakdown structure after the risk response
decision?
Because of work that was omitted during the WBS creation
Because of new work generated by the risk responses
Because of risk responses that are now activities
Because of risks associated with work packages
Answer: b) After the risk response new work package might be generated and should be included as part
of WBS and later into network diagram.
107 . Two team members are arguing over who was responsible for distributing the risk
status. Where should they look to clarify the responsibility?
Communication management plan
Procurement Management plan
Risk register
Risk Management plan
Answer: a) Communication management plan provides the stakeholder responsibility.
108 . Your project requires that you install 190 computers. The vendor offers you a 15%
discount on the basic software if your company will purchase 200 or more computers. You
communicate this offer with other functions within the organization so that your project can
save significant amount of funds. What is this risk response called?
Exploiting
Avoidance
Sharing
Transference
Answer: c) Sharing is the opportunity and is opposite to transfer.

35. 109 . You have identified a risk earlier in the project and accepted it. While monitoring the
project, the risk occurred. Which of the following documents helps in taking further action?
Risk Response Plan
Fallback Plan
Mitigation Plan
Risk Register
Answer: a) The risk response plan communicates how specific risks will be dealt with and the action
steps that are required to carry them out.
110 . You are the project manager of a large construction project. Part of the project
involves the electrical cabling work in the building your project is creating. You and the
project team decide that the cabling work is too dangerous so you hire an experienced
electrician to perform the work for the project. What type of risk response is this an example
of?
Acceptance
Mitigation
Transference
Avoidance
Answer: c) Transfer is the negative risk response used for shifting the activities in which the project team
members do not have expertise.
111 . You are in the middle of the project and while collecting the information as part of
earned value management, you find that CPI is 0.74. What you do to make CPI as 1?
Reduce a test cycle, in the System Testing phase
Reduce scope by cutting down non- essential features
Add more resources to expedite the schedule
Revisit estimates and eliminate risks; re- estimate
Answer: d) Option (c) wouldn't reduce cost. Option (a) and (b) would always have a negative effect as
they compromise on quality or scope. Of all the available option's (d) is the one with the minimum
negative effect..

36. 112 . While executing the project, risk trigger was identified. The project manager responds
to this with contingency plan which proved to be ineffective. One of the stakeholders is not
happy with this and escalates about his dissatisfaction with risk management team. What
should the project manager do?
Make sure stakeholders are aware that risk management team performs a high level
Inform project sponsor, since it is his job to manage the stakeholder
Ask to meet with the stakeholder in person to clarify the situation
Inform PMO, that stakeholder behavior is affecting the project team morale.
Answer: c) The PM should first speak to the stakeholder and then can interact with PMO.
113 . Over lunch with another project manager, you discuss ways to identify risks on your
project. The next day, the other project manager sends you risk identification software
created by her company with a copyright date of 1998. What should you do?
Find out if using an old format would be acceptable
Obtain approval from your legal department
Share some of your templates with her to improve her company's abilities
Send the software back
Answer: d) It's the code of ethics where you need to maintain integrity and confidentiality.
114 . You are a project manager working on a compliance project in a banking firm. The
project is scheduled to complete six weeks from now. Your sponsor tells you that if the
project is finished sooner, the company can get some monetary incentives offered by the
government. Deciding to fast track the project, would have what effect?
Increase risk in the project
Not affect the project risk
Decrease risk in the project
Cannot be determined
Answer: a) Fast-tracking is the process of rescheduling tasks to be performed in parallel that were
originally planned in series. Remember, fast-tracking always involves risk that could lead to increased
cost and rework later..

37. 115 . Which of the following is NOT a tool in Identify Risks?
Brainstorming
Risk Urgency Assessment
Delphi technique
SWOT Analysis
Answer: b) A Risk Urgency Assessment is a tool of Qualitative Analysis. Risk Identification is all about
finding risks. Qualitative Analysis is about ranking them based on what your team thinks their impact and
probability will be for your project. (Quantitative Analysis, on the other hand, is about getting the numbers
to back up your opinions).
116 . Your team is developing a risk management plan. Which tool and technique of this
process is used to develop risk cost elements and schedule activities that will be included in
the project budget and schedule?
Planning meetings and analysis
Strategies for both threats and opportunities
Information gathering techniques
Risk data quality assessment
Answer: a) Planning meetings and analysis is the only tool and technique of the Risk Management
Planning Process.
117 . Which of the following inputs provide information to compare the actual technical
accomplishments during project execution to the project's planned schedule of technical
achievements?
Work performance information
Variance and trend analysis
risk register
forecasting
Answer: a) work information provides the information about the comparison.

38. 118 . You are preparing for the risk identification process. You will need to involve several of
the project's key stakeholders to help you identify and communicate the identified risk
events. You will also need several documents to help you and the stakeholders identify the
risk events. Which one of the following is NOT a document that will help you identify and
communicate risks within the project?
Risk register
Activity cost estimates
Stakeholder register
Activity duration estimates
Answer: a) Risk register captures all the risks and should be communicated to stakeholder.
119 . All of the following are tools and techniques for risk identification except:
Monte Carlo simulation
Interviewing
SWOT analysis
Delphi technique
Answer: a) Monte Carlo simulation is associated with Quantitative Risk Analysis and uses iterative
simulations to determine project outcomes.
120 . You are managing a software engineering project, when two team members come to
you with a conflict. The lead developer has identified an important project risk: you have a
subcontractor that may not deliver on time. The team estimates that there is a 40% chance
that the subcontractor will fail to deliver. If that happens, it will cost an additional $15,250 to
pay your engineers to rewrite the work, and the delay will cost the company $20,000 in lost
business. Another team member points out an opportunity to save money an another area
to offset the risk. If an existing component can be adapted, it will save the project $4,500 in
engineering costs. There is a 65% probability that the team can take advantage of that
opportunity. What is the expected monetary value (EMV) of these two things?
-14100
6100
-11175
$39, 750
Answer: c) To calculate the expected monetary value (EMV) of a set of risks and opportunities, multiply
each probability by its total cost and add them together. In this question, the cost of the risk is -$15,250 +
-$20,000 = -$35,250, so its EMV is 40% x -$35,250 = -$14,100. The value of the opportunity is $4,500
and its probability is 65%, so its EMV is 65% x $4,500 = $2,925. So the total EMV for the two is -$14,100
+ $2,925 = -$11,175.Don't forget that the cost of a risk is negative, and the cost of an opportunity is
positive.

39. 121 . You are a project manager with a financial firm that has multinational dealings. You
feel the financial meltdown in one of the client countries could affect your project adversely,
so you want to hedge your risks. Although the probability of occurrence of the event is low,
you are advised to play it safe. In terms of risk attitude, your organization could best be
described as?
Risk Seeker
Risk Averse
Risk Neutral
Risk Mitigator
Answer: b) Someone who doesn't want to take risk is called risk averse and this project manager seems
to be part of such an organization.
122 . Which one of the following is NOT a tool or technique for the quantitative risk analysis
process?
Expert judgment
Data gathering and representation techniques
Organizational process assets
Quantitative risk analysis and modeling techniques
Answer: c) Organizational process assets will be used as input.
123 . You have created a contingency response that the cost performance index should be
equal to or less than 0.8. From the earned value technique, your project shows EV as
$9000, AC as $10000 and PV as $7200. Are you preferred to use contingency reserve?
Yes as the CPI is -$1000
No as the CPI is 0.9
Yes as the CPI is -$2800
No as the CPI is 0.8
Answer: b) CPI=EV/AC= 9000/10000= 0.9 which is more than 0.8 and hence not using.
124 . Which of the following process is not mandate for short term project as per PMI?
Risk Limitation
Perform Qualitative Risk Analysis
Identify Risk
Perform Quantitative Risk Analysis
Answer: d) Quantitative risk analysis is not mandate for short term projects.

40. 125 . As you are executing your project, you are constantly checking your risk register to be
sure that you have planned responses for all of your risks. At one of the team status
meeting, you find that a lower priority risk has suddenly become more likely. Where do you
keep information about low priority risks?
Triggers
The watchlist
Risk Management Plan
Qualitative analysis documents
Answer: b) Sometimes you'll find that some risks have obviously low probability and impact, so you won't
put them in your register. Instead, you can add them to a watchlist, which is just a list of risks that you
don't want to forget about, but you don't need to track as closely. You'll check your watchlist from time to
time to keep an eye on things.
126 . You are conducting a status meeting and monitoring your risk register when you
discover a risk that remains even after you implement all of your response strategies. What
kind of risk is this and what should you do about it?
It's a secondary risk. You don't need to worry about it.
It's a residual risk. You need to plan a response strategy for it.
It's a residual risk. You don't need to plan a response strategy for it because you've already implemented all of the
risk responses you can plan for.
It's a contingency reserve. You should only use it if the first risk occurs
Answer: c) Residual risks are risks that remain even after you have planned for and implemented all of
your risk response strategies. They don't need any further analysis because you have already planned
the most complete response strategy you know in dealing with the risk that came before them.
127 . You are working with management on defining a contingency reserve for your project.
Currently the project is scheduled to last 18 months and it has a cost budget of $2.5 million.
What two areas of the project can the contingency reserve address in regard to risk
management?
Quality and costs
Cost and resource management
Risk and project planning
Costs and schedule
Answer: d) Contingency reserve will take care of cost and time.

41. 128 . One of the team members find risk management very difficult to manage. She asks
you, a lead project manager, at what stage in the project will risk management become
easier. What answer best resolves the difficulty of risk management practices and the efforts
required?
Risk management only becomes easier with practice
Risk management only becomes easier when the project is in its closing stage
Risk management only becomes easier when the project moves into project execution.
Risk management is an iterative process and never becomes easier.
Answer: a) Practice makes a man perfect. The same principle applies to risk management.
129 . You are working on a project which is in the development of a software. This software
is in the new technology and after the development you know that there will be defects
which may get delivered to the customer. If the customer reports these defects, rework will
be required and will cost more to the organization as part of the operations. To reduce this
overhead cost, you decide to take a proactive approach of introducing special testing task.
But this will cost about increase in the project of about 15%, but overall the organization is
able to save about 25% of the cost. What is this risk response called?
Avoid
Share
Mitigate
Transfer
Answer: c) By having a testing team, you are mitigating the risk.
130 . What is the best a project manager can do after carrying out qualitative risk analysis?
Choose the best option.
Focus on near-term risks first.
Create a risk breakdown structure and delegate the risk analysis to the appropriate project team members.
Focus on high-priority risks.
Analyze as many risks as possible regardless of who initiated the risk event.
Answer: c) High priority risks will be first priority.

42. 131 . Purchasing insurance is considered an example of risk:
Mitigation
Transfer
Acceptance
Avoidance
Answer: b) Transfer generally involves the shifting of a risk from one party to another. It does not
illuminate or reduce the risk. Insurance is a common form of transfer of risk.
132 . A Project manager is in the planning stage. In the first planning meeting, the project
manager has begun the initial process of finding the risk tolerance levels and attitudes of the
stakeholders. Which of the following provides good platform for the project manager to start
this step?
Organizational process asset
Project scope statement
Project Charter
Enterprise environmental factor
Answer: d) Enterprise environmental factors provides the risk tolerance levels.
133 . You are a managing a project and outsourced some of the work to contractors. In the
status meeting with the contractor, you sensed that there can be delay from the contractor's
deliverable or in the extreme conditions, he may not deliver the work packages at all. To
overcome this risk, you formed a team with some experts who can work on those work
packages in case the contractor fails to deliver. What is the risk response plan here?
Transference
Mitigation
Avoidance
Acceptance
Answer: b) Risk mitigation means taking some sort of action that will cause a risk, if it materializes, to do
as little damage to your project as possible. Having team members spend time doing work to prepare for
the risk is a good example of risk mitigation.

43. 134 . What is salience model which helps in identifying risks from different stakeholders?
Influence/impact grid, grouping the stakeholders based on their active involvement ('influence') in the project and their
ability to affect changes to the project's planning or execution ('impact').
Grouping the stakeholders based on their level of authority ('power') and their active involvement ('influence') in the
project.
Grouping the stakeholders based on their level of authority ('power') and their level or concern ('interest') regarding
the project outcomes.
Describing classes of stakeholders based on their power (ability to impose their will), urgency (need for immediate
attention), and legitimacy (their involvement is appropriate).
Answer: d) Stakeholder analysis helps in identifying stakeholder's interest, impact, expectation, power.
135 . With regards to control risk, which of the following statement is not true?
Risk identification and monitoring should occur throughout the life of the project.
Risk audits should occur throughout the life of the project and are specifically interested in measuring the team's
performance in the Risk Identification and Risk Monitoring and Control processes.
Risks should be monitored for their status and to determine whether the impact to the objectives have changed
Technical performance measurement variances may indicate that a risk is looming and should be reviewed at status
meetings.
Answer: b) Risk audits should be performed throughout the life of the project and are specifically
interested in looking at the implementation and effectiveness of risk strategies.
136 . You are the project manager in company XYZ. You have been asked to create a
proposal for a construction project for a client. While studying the relevant details, you
realize that there are several requirements within the SOW and RFP provided by the client
that would eliminate XYZ from bidding on the construction project. You propose to
management to allow XYZ to create a partnership with a competitor GFK so that together
they could bid on the construction project and qualify for the customer's requirements. What
risk response are you proposing to management?
Exploiting
Teaming agreement
Transference
Sharing
Answer: d) Sharing is a positive risk response often seen through partnerships and teaming agreements
to seize an opportunity. Sharing response is where two or more entities share a positive risk. Risk sharing
deals with sharing of responsibility and accountability with others to facilitate the team with the best
chance of seizing the opportunity. Teaming agreements are good example of sharing the reward that
comes from the risk of the opportunity.

44. 137 . You hired a contractor to complete a portion of your project work. The contract used
was a cost-plus contract. If you were to perform a risk audit, who would carry the risk in this
scenario?
You would because you are the project manager.
Contractor would because of the contract type.
You would because of the contract type.
Contractor would because he is the hired contractor.
Answer: c) The buyer carries the risk in case of cost reimbursable type of contract.
138 . Defining ------------- will provide a structure for systematically identifying risks to a
consistent level of detail during the project planning process. The areas defined in this
process should reflect common sources of risk for the industry or application area.
Assumptions
Constraints
The product description
Risk categories
Answer: d) Assumptions are information items that should be verified. They are not generally considered
to be based on factual data. Constraints are limitations that should be considered when developing
project plans. The product description provides details about the complexity of the product to be
delivered. Risk categories assist is detailed risk identification and may be utilized with a Risk Breakdown
Structure (RBS).
139 . You are communicating to the stakeholders about the project status showing there is a
delay in the project. You decide to carry out fast tracking as part of schedule compression in
collaboration with stakeholder agreement. What is the impact of this technique?
Costs
Quality control concerns
Human resource needs
Risks
Answer: d) Fast Tracking makes the project riskier.

45. 140 . The project is scheduled to last for 18 months. Management asks PM how often the
project team is participating in risk reassessment in this project. What should PM tell the
management if he is following the best practices for risk management?
Project risk management is scheduled for every month in the 18-month project.
Project risk management has been concluded with the project planning.
At every status meeting of the project team, project risk management is an agenda item.
Project risk management happens at every milestone.
Answer: c) Risk management should happen throughout the project and the best practice is to have
during status meeting.
141 . You are working with his project team to plan the risk responses for a Project. You
would like the project team to work together on establishing risk thresholds in the project.
What is the purpose of a risk threshold?
It helps to identify those risks for which specific responses are needed
It is a limit of the funds that can be assigned to risk events.
It is a warning sign that a risk event is going to happen.
It is a study of the organization's risk tolerance.
Answer: a) Every organization defines the risk threshold so that it can take appropriate action based on
the trigger points.
142 . You and the project team have created risk responses for many of the risk events in
the project. Where should you document the proposed responses and the current status of
all identified risks?
Stakeholder management strategy
Risk management plan
Risk register
Lessons learned documentation
Answer: c) Risk register is the document in which all the risks will be entered..
143 . Choose the incorrect statement:
Probability for success is greatest in the project Closing processes.
The project manager's influence is greatest in the project Closing processes.
The stakeholders' influence is least in the project Closing processes.
Risk is greatest in the project Closing processes.
Answer: d) Risk is lowest during the Closing processes because you've completed the work of the project
at this point.

46. 144 . You are working in a project and identified some risks related to procurement. You
identified the procurement manager as a person who is empowered with a risk response
and will control all aspects of the identified risk response in which a particular risk event will
happen within the project. What title, in regard to risk, is bestowed on procurement
manager?
Risk expeditor
Risk owner
Risk team leader
Risk coordinator
Answer: b) Risk owner is the one who monitors and ensures that risk response being implemented..
145 . You are the project manager of a Project and there's a risk that your team has
identified, which could cause the project to be delayed by more than a month. You don't
want this risk event to happen so you devise extra project activities. The extra steps,
however, will cost the project an additional $10,000. What type of risk response is this
approach?
Enhancing
Exploiting
Mitigation
Transference
Answer: c) Mitigation is reducing the impact for the project deliverables.
146 . You are a project manager in a financial firm with multinational dealings. You feel the
financial meltdown in one of the client's countries could affect your project adversely and
you want to hedge your risks. Although the probability of occurrence of the event is low, you
are advised to play it safe. In terms of risk attitude, your organization could best be
described as?
Risk Seeker
Risk Averse
Risk Neutral
Risk Mitigator
Answer: b) Someone who doesn't want to take risks is called risk averse and the project manager seems
to be part of such an organization. Option (c) risk neutral describes a person/or an organization which is
indifferent to the risk and option (a) risk seeker suggests an aptitude to take risks with an opportunity for
higher returns. Option (d) risk mitigation is a risk response strategy and is an invalid choice.

47. 147 . Sensitivity analysis is a technique for systematically changing parameters in a model
to determine the effects of such changes and is useful for computer modelers for a range of
purposes. Which of the following options will not be useful to meet the purpose of sensitivity
analysis?
Increased understanding or quantification of the system
Estimating the average outcome
Model development
Decision making or the development of recommendations for decision makers
Answer: b) Average outcome is not a good technique. All remaining choices are good for sensitivity
analysis.
148 . Using the following information and a normal distribution curve, what is the probability
that the project will be completed in 64 days? Optimistic time is 48 days. Pessimistic time is
72 days. Most likely time is 60 days
0.16
0.84
0.5
1
Answer: b) To Determine the probability of completing in 64 days, the following steps are required: 1.
Determine the weighted average using the formula {Optimistic + 4(Most Likely) + Pessimistic}/6. 2.
Determine the standard deviation using the formula (Pessimistic - Optimistic) / 6. In the normal
distribution curve there is a 68% probability that the outcome will be within 1 standard deviation from the
mean. There is a 95% probability that the result will fall within 2 standard deviations from the mean and a
99.73% probability that the result will fall within 3 standard deviations from the mean. If the mean is at the
50% point and there is a 68% probability of the result falling within plus or minus one standard deviation
of the mean, then the probability of 1 standard deviation is divided by 2. The result is 34. Adding 34 to
50% = 84%. Subtracting 34 from 50% = 16%. The Standard deviation in this example is 4. The mean is
60. 60 + 4 = 64 or one standard deviation from the mean. 50% + 34 = 84%.
149 . Which of the following is NOT a tool or technique of Control Risks?
Bringing in an outside party to review your risk response strategies
Revisiting your risk register to review and reassess risks
Using Earned Value analysis to find variances that point to potential project problems
Gathering information about how the work is being performed
Answer: d) When do you gather work performance information? You do it when you're reporting on the
performance of the team - that's why it's a tool and technique of the Report Performance process. But
that's not something you do during Monitor and Control Risks - Work Performance Information is an input
to that process, which means it needs to be gathered BEFORE you start monitoring and controlling your
risks. Some questions on the PMP exam will describe tools or techniques rather than using their names.
A question might say 'bringing in an outside party to review your risk response strategies' instead of 'Risk
Audit'. You're actually asked about concepts you've learned, not just about a bunch of things you've
memorized.

48. 150 . When you are working on a project to mitigate the risk you decide to use compression
technique. Which of the following technique calls for updating HR management plan?
Teaming agreements
Transference
Crashing the project
Fast tracking the project
Answer: c) Crashing adds to resources which in turn leads to updating of HR plan.
151 . You are working with your project team to begin identifying risks for the project. As part
of your preparation for identifying the risks within the project you will need many inputs for
the process. Which one of the following is NOT an input to the risk identification process?
Quality management plan
Cost management plan
Stakeholder register
Procurement management plan
Answer: d) Procurement management plan is not an input for identify risk process.
152 . What is the EMV for a risk which is threat with probability of 40% and impact of
$7000?
Negative $2800
Negative $67,000
Zero - the risk event has not yet occurred
27000
Answer: a) EMV= 40% * $7000=$2800 and is negative as it will cost to the project.

49. 153 . You are asked to identify risk events within the project. You would first like to examine
the project documents including the plans, assumptions lists, project files and contracts.
What key thing will help you to discover risks within the review of the project documents?
The project documents will help the project manager to identify what risk identification approach is best to pursue.
Lack of consistency between the plans and the project requirements and assumptions can be the indicators of risk in
the project.
Poorly written requirements will reveal inconsistencies in the project plans and documents.
Plans that have loose definitions of terms and disconnected approaches will reveal risks.
Answer: b) The variation from the expected can result in risk in the project.
154 . Qualitative risk analysis uses lot of tools and techniques. Which is not one of them?
Risk urgency assessment
Expected monetary value analysis
Probability and impact matrix
Risk categorization
Answer: b) Qualitative Risk Analysis is all about figuring out prioritizing each risk, and figuring out its
probability and impact. It's an important part of risk planning. But it's not about coming up with specific
numbers! That's what Quantitative Risk Analysis is for - and EMV analysis is part of Quantitative (not
Qualitative) analysis, because it's where you assign numeric values to risks.
155 . What is pure risk?
It is a risk event that is generated due to errors or omission in the project work.
It is a risk event that is created by a risk response.
It is a risk event that only has a negative side, such as loss of life
It is a risk event that cannot be avoided because of the order of work.
Answer: c) Pure risk is always negative and should come out of that.
156 . You are preparing to plan risk responses for your project with your project team. How
many risk responses are available for a positive risk event in the project?
Three
Four
Seven
One
Answer: b) Both positive and negative carries 4 responses.

50. 157 . Why the qualitative risk analysis should be carried out?
It is a cost-effective means of establishing probability and impact for the project risks.
Qualitative risk analysis helps segment the project risks, create a risk breakdown structure, and create fast and
accurate risk responses.
All risks must pass through quantitative risk analysis before qualitative risk analysis.
It is a rapid and cost-effective means of establishing priorities for the plan risk responses and lays the foundation for
quantitative analysis.
Answer: d) Qualitative risk analysis helps in providing ranking after arriving at probability and impact.
158 . Identify Risk process determines the risks that affect the project and document their
characteristics. Why should the project team members be involved in the Identify Risk
process?
They are the individuals that will need a sense of ownership and responsibility for the risk events.
They are the individuals that will have the best responses for identified risks events within the project.
They are the individuals that are most affected by the risk events.
They are the individuals that will most likely cause and respond to the risk events.
Answer: a) Please note that involve the team members for any planning activities..
159 . You are conducting risk management meeting and identified a risk with low probability
and less impact. What do you do with this risk?
Risk alarm
Watchlist
Observation list
Risk register
Answer: b) Low risks and residual risks are kept under watchlist.
160 . The PM asked you to help him complete some probability distributions for his project.
What portion of the project will you most likely use for probability distributions?
Bias towards risk in new resources
Risk probability and impact matrixes
Risk identification
Uncertainty in values such as duration of schedule activities
Answer: d) Probability distribution provides the uncertainties in values like cost, time.

51. 161 . Which of the following statement is true?
The quantitative risk analysis process will review risk events for their probability and impact on the project objectives.
The quantitative risk analysis seeks to determine the true cost of each identified risk event and the probability of each
risk event to determine the risk exposure.
The quantitative risk analysis process will analyze the effect of risk events that may substantially impact the project's
competing demands.
The quantitative risk analysis reviews the results of risk identification and prepares the project for risk response
management.
Answer: c) Quantitative risk analysis helps in numerically assigning the impact considering the overall
project objectives.
162 . Which of the following is not an input for identifying stakeholders process?
Project Charter
Organizational process assets
Project management plan
Enterprise environmental factors
Answer: c) Project management plan is developed as part of the planning whereas identifying
stakeholders happens at the initiating process group.
163 . While addressing the root causes of the risks, you are using cause and effect diagram.
But sponsor is not happy and advises you to use Ishikawa or fishbone diagram. To what
conclusion will you come after analyzing this?
It is a graphical representation of situations showing causal influences.
It is the same thing as a root cause diagram.
It shows how various elements of a system interrelate.
It diagrams the risks according to the work breakdown structure including resources.
Answer: b) The other name for cause and effect diagram is Ishikawa or fishbone diagram..
164 . There are six inputs to the quantitative risk analysis process. Which one of the
following is NOT an input to the perform quantitative risk analysis process?
Enterprise environmental factors
Risk management plan
Cost management plan
Scope Baseline
Answer: d) Scope Baseline is not an input.

52. 165 . You are working with the project team on the Perform Qualitative Risk Analysis
process. You are having the project team to review the project scope statement as an input
to the qualitative risk analysis process. Why?
The project scope statement must be understood to see the project requirements and the inherent risks of the
project.
The project scope statement will reveal the type of project as either a recurrent or first-of-its- kind project.
The project scope identifies the risks associated with project constraints.
The project scope statement must be reviewed to understand the quality requirements and the risks associated with
the demand for quality.
Answer: b) Scope statement is about scope description, assumption, constraints, acceptance criteria, etc.
166 . Project risk is typically characterized by which three elements:
Severity of impact, duration of impact and cost of impact
Identification, type of risk category and probability of impact
Risk event, risk probability and the amount at stake
Occurrence, frequency and cost
Answer: c) A risk event is the actual occurrence of the risk. Example-equipment failure. Risk probability is
the likelihood that a risk event may occur. Amount at stake refers to the impact or consequence of the risk
and is usually described in terms of the effect on cost or schedule
167 . You are coming up with risk responses plan. You realized that if any unknown risk
materializes, you need to park some money for the same. For this you refer to historical data
and come up with some figure of how much should be parked. What is this called?
General contingency to try to compensate
Document the unknown risk items and calculate the expected monetary value based on probability and impact that
result from the occurrence
Determine the unknown risk events and the associated cost, then add the cost to the project budget as reserves
Add a 10% contingency
Answer: a) The past experience or the historical data helps in contingency planning.

53. 168 . In what portion of a project are risk and opportunities greatest and require intense
planning and anticipation of risk events?
Closing
Planning
Initiating
Executing
Answer: c) Risk will be highest during the initial stages and should come down as the project progresses.
169 . Your organization is running a project with budget of $X. You already progressed
about 80% of the work and come to know that a new law is being implemented which may
affect the project. What is the best response you can take at this point of time?
Acceptance
Transference
Mitigation
Enhance
Answer: a) The organization has already invested so much. Better option is to proceed and see what
happens which is nothing but acceptance of the risk.
170 . You and the project team are recreating a probability and impact matrix using RAG
rating. There is some confusion and disagreement among the project team as to how a
certain risk is important and priority for attention should be managed. Where can we
determine the priority of a risk, given its probability and impact?
Risk management plan
Project sponsor
Risk response plan
Look-up table
Answer: d) Look up table provides the weightage based on Probability and Impact.