Question 1

Contingency plans are predefined actions that the project team will take if an identified risk event occurs.

Accepted Answer

Contingency plans are predefined actions that the project team will take if an identified risk event occurs.

Question 2

A risk-seeking person prefers outcomes that are more uncertain and is often willing to pay a penalty to take risks.

Accepted Answer

A risk-seeking person prefers outcomes that are more uncertain and is often willing to pay a penalty to take risks.

Question 3

Risk utility rises at a decreasing rate for a _____ person.
A) risk-seeking
B) risk-averse
C) risk-neutral
D) risk-indifferent

Accepted Answer

Utility rises at a decreasing rate for a risk-averse person. In other words, when more payoff or money is at stake, a person or organization that is risk-averse gains less satisfaction from the risk, or has lower tolerance for the risk.

Question 4

One possible response to managing negative risk it to accept the potential effects from the risk.

Accepted Answer

There are a number of possible actions that project managers can take to avoid, lessen, change or accept the potential effects of risk on their projects.

Question 5

The lower the earned monetary value calculation for a project, the chances of project success is higher.

Accepted Answer

Expected monetary value (EMV) is the product of a risk event probability and the risk event's monetary value. Because the EMV provides an estimate for the total dollar value of a decision, you want to have a positive number; the higher the EMV, the better.

Question 6

Risk events refer to specific, certain events that may occur to the detriment or enhancement of the project.

Accepted Answer

Risk events refer to specific, uncertain events that may occur to the detriment or enhancement of the project.

Question 7

The main output of qualitative risk analysis is updating the risk register.

Accepted Answer

The main output of qualitative risk analysis is updating the risk registers.

Question 8

Large, complex projects involving leading-edge technologies often require extensive quantitative risk analysis.

Accepted Answer

Large, complex projects involving leading-edge technologies often require extensive quantitative risk analysis.

Question 9

Identified risks may not materialize, or their probabilities of occurrence or loss may diminish.

Accepted Answer

Identified risks may not materialize, or their probabilities of occurrence or loss may diminish.

Question 10

Top Ten Risk Item Tracking is a quantitative risk analysis tool.

Accepted Answer

Top Ten Risk Item Tracking is a qualitative risk analysis tool.

Question 11

Unknown risks can be managed proactively.

Accepted Answer

Known risks can be managed proactively. However, unknown risks, or risks that have not been identified and analyzed, cannot be managed.

Question 12

Brainstorming is a systematic, interactive forecasting procedure based on independent and anonymous input regarding future events.

Accepted Answer

Brainstorming is a technique by which a group attempts to generate ideas or find a solution for a specific problem by amassing ideas spontaneously and without judgment. The Delphi technique is a systematic, interactive forecasting procedure based on independent and anonymous input regarding future events.

Question 13

The psychology literature shows that individuals, working alone, produce fewer ideas than the same individuals produce through brainstorming in small, face-to-face groups.

Accepted Answer

Although businesses use brainstorming widely to generate new ideas, the psychology literature shows that individual people working alone produce a greater number of ideas than they produce through brainstorming in small, face-to-face groups.

Question 14

Those who are _____ have a higher tolerance for risk, and their satisfaction increases when more payoff is at stake.
A) risk-seeking
B) risk-averse
C) risk-neutral
D) risk-indifferent

Accepted Answer

Those who are risk-seeking have a higher tolerance for risk, and their satisfaction increases when more payoff is at stake. A risk-seeking person prefers outcomes that are more uncertain and is often willing to pay a penalty to take risks.

Question 15

A probability/impact matrix or chart lists the relative probability of a risk occurring on one side of a matrix or axis on a chart and the relative impact of the risk occurring on the other.

Accepted Answer

A project manager can chart the probability and impact of risks on a probability/impact matrix or chart, which lists the relative probability of a risk occurring and the relative impact of the risk occurring.

Question 16

The last step in project risk management is deciding how to address the knowledge area for a particular project by performing risk management planning.

Accepted Answer

The first step in project risk management is deciding how to address the knowledge area for a particular project by performing risk management planning.

Question 17

The risk register can be created with a simple Microsoft Word or Excel file.

Accepted Answer

The risk register is often a simple Microsoft Word or Excel file, but it can also be part of a more sophisticated database.

Question 18

The Monte Carlo analysis can predict the probability of finishing by a certain date or the probability that the cost will be equal to or less than a certain value.

Accepted Answer

Monte Carlo analysis simulates a model's outcome many times to provide a statistical distribution of the calculated results. This analysis can predict the probability of finishing by a certain date or the probability that the cost will be equal to or less than a certain value.

Question 19

Risks can have both negative and positive effects on meeting project objectives.

Accepted Answer

Project risk management involves understanding potential problems that might occur on the project and how they might impede project success. However, there are also positive risks or opportunities, which can result in good outcomes for a project.

Question 20

The Delphi technique is a systematic, interactive forecasting procedure based on independent and anonymous input regarding future events.

Accepted Answer

The Delphi technique is an approach to gathering information that helps prevent some of the negative group effects found in brainstorming. The basic concept of the Delphi technique is to derive a consensus among a panel of experts who make predictions about future developments.

Quiz 11: Project Risk Management

Contingency plans are predefined actions that the project team will take if an identified risk event occurs.

A risk-seeking person prefers outcomes that are more uncertain and is often willing to pay a penalty to take risks.

Risk utility rises at a decreasing rate for a _____ person.

One possible response to managing negative risk it to accept the potential effects from the risk.

The lower the earned monetary value calculation for a project, the chances of project success is higher.

Risk events refer to specific, certain events that may occur to the detriment or enhancement of the project.

The main output of qualitative risk analysis is updating the risk register.

Large, complex projects involving leading-edge technologies often require extensive quantitative risk analysis.

Identified risks may not materialize, or their probabilities of occurrence or loss may diminish.

Top Ten Risk Item Tracking is a quantitative risk analysis tool.

Unknown risks can be managed proactively.

Brainstorming is a systematic, interactive forecasting procedure based on independent and anonymous input regarding future events.

The psychology literature shows that individuals, working alone, produce fewer ideas than the same individuals produce through brainstorming in small, face-to-face groups.

Those who are _____ have a higher tolerance for risk, and their satisfaction increases when more payoff is at stake.

A probability/impact matrix or chart lists the relative probability of a risk occurring on one side of a matrix or axis on a chart and the relative impact of the risk occurring on the other.

The last step in project risk management is deciding how to address the knowledge area for a particular project by performing risk management planning.

The risk register can be created with a simple Microsoft Word or Excel file.

The Monte Carlo analysis can predict the probability of finishing by a certain date or the probability that the cost will be equal to or less than a certain value.

Risks can have both negative and positive effects on meeting project objectives.

The Delphi technique is a systematic, interactive forecasting procedure based on independent and anonymous input regarding future events.