Practice Test

The PMI Risk Management Professional certification needs adherence to the methods and tools for establishing risk processes.

  • True
  • False

Answer: True

Explanation: PMI-RMP certification requires in-depth knowledge and application of risk management tools and processes.

One of the steps to establish risk processes is to identify the potential risks.

  • True
  • False

Answer: True

Explanation: Identifying potential risks is an integral part of establishing risk management processes.

The risk process must only be established once during a project’s lifecycle.

  • True
  • False

Answer: False

Explanation: Risk management is an ongoing process that needs to be updated and managed throughout the project’s lifecycle.

The risk register is instrumental in establishing effective risk processes.

  • True
  • False

Answer: True

Explanation: The risk register helps to record, monitor, and track risks, making it a critical tool in risk management.

It is not crucial to communicate risks after establishing risk processes.

  • True
  • False

Answer: False

Explanation: Risk communication is an essential part of risk management. It ensures that all stakeholders are informed about potential risks, the steps to mitigate them, and any changes or updates.

Which of the following is not a step in the risk management process?

  • Risk Identification
  • Risk Assessment
  • Risk Enhancement
  • Risk Mitigation

Answer: Risk Enhancement

Explanation: The risk management process includes risk identification, risk assessment, and risk mitigation. There’s no process called “risk enhancement.”

Qualitative risk analysis tools are the most preferred in establishing risk processes.

  • True
  • False

Answer: False

Explanation: The choice between qualitative and quantitative risk tools depends on the type of project or risks encountered. Neither of them is universally preferred.

Risk processes and tools are developed independent of the project scope.

  • True
  • False

Answer: False

Explanation: The scope and nature of the project significantly impact the design of risk processes and tools.

Which of the following is NOT a tool used in risk management?

  • Risk Register
  • Gantt chart
  • SWOT Analysis
  • WBS Diagram

Answer: WBS Diagram

Explanation: A Work Breakdown Structure (WBS) diagram is a project management tool, not a risk management tool.

The frequency of risk reviews should be determined during the establishment of risk processes.

  • True
  • False

Answer: True

Explanation: Setting up regular risk review intervals is a key part of establishing risk management processes.

Risk treatment is the process of selecting and implementing measures to modify risk.

  • True
  • False

Answer: True

Explanation: Risk treatment involves choosing and executing actions that can adjust or modify risk.

Which of the following techniques is not used for risk identification in project risk management?

  • Delphi technique
  • Decision tree
  • SWOT analysis
  • Checklist analysis

Answer: Decision tree

Explanation: Decision trees are used for risk analysis and response but not for risk identification.

It is pivotal to reassess risks after implementing risk responses.

  • True
  • False

Answer: True

Explanation: Once a risk response is implemented, it is vital to reassess the risk to track its impact and determine if further actions are needed.

Risk tolerance is the amount of risk that an organization is willing to accept.

  • True
  • False

Answer: True

Explanation: Risk tolerance refers to the degree of risk that an organization or individual is prepared to accept.

Risk owners are the people most affected by the risk.

  • True
  • False

Answer: False

Explanation: Risk owners are the individuals or entities responsible for managing a particular risk, but they may not necessarily be the ones most impacted by the risk.

Interview Questions

What is a risk register in the context of project management?

A risk register is a document used in project management which identifies potential risks, their impact, and mitigation plans. It’s a crucial tool in risk management process as it enables the project team to keep track of all identified risks and corresponding responses.

What tool helps in the qualitative risk analysis process by prioritizing risks for further analysis or action?

The Probability and Impact Matrix is a tool used in qualitative risk analysis to prioritize risks. By evaluating each risk’s likelihood of occurrence and impact on project objectives, high-priority risks can be identified for further analysis.

What is a Risk Breakdown Structure (RBS)?

A Risk Breakdown Structure (RBS) is a hierarchical representation of risks, usually organized by risk categories. It provides a structured way to identify and understand project risks.

What is the process of Risk Identification in project management?

Risk identification is the first step of the risk management process. It involves the recognition of potential risks that may affect the project and documenting their characteristics.

In risk management, what is the primary purpose of Risk Response Planning?

Risk Response Planning is to develop options and actions to enhance opportunities and reduce threats to project objectives. It forms a key part of the overall risk management strategy.

How is a risk owner defined in risk management?

A risk owner is a person or entity responsible for managing a particular risk, including implementing risk response plans.

What are the four common strategies for negative risks or threats?

The four common strategies for negative risks or threats include Avoidance, Transference, Mitigation, and Acceptance.

What role does Risk Tolerance play in project management?

Risk tolerance determines the level of risk that an organization is willing to accept. Understanding risk tolerance helps project managers make decisions about risk management strategies.

What do you mean by residual risks in project management?

Residual risks are the risks that are expected to remain after risk response strategies have been implemented.

What is the difference between a risk audit and a risk review?

A risk audit aims to assess the efficiency and effectiveness of risk management processes, whereas a risk review is a formal reassessment of the identified risks and the effectiveness of their response plans.

How does a SWOT Analysis contribute to project risk management?

SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) helps identify potential risks and opportunities. By understanding these aspects, project managers can prepare better risk responses.

What is the purpose of conducting a sensitivity analysis?

Sensitivity analysis is used to determine how different variations of project variables affect the project’s outcome. It helps to identify risks which could have the most potential impact on the project.

What do you understand by “risk appetite”?

Risk appetite is the level of risk an organization is willing to pursue or accept to reach its objectives.

What is contingency planning in risk management?

Contingency planning is a risk response strategy that involves preparing alternative action plans in anticipation of a risk event. Contingency plans can help minimize potential disruptions when a risk materializes.

In risk management, what is the meaning of secondary risks?

Secondary risks are risks that arise as a direct result of implementing a risk response. They are typically not identified during the initial risk identification process, but need to be tracked and managed just like primary risks.

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