Practice Test

True or False: In the context of project management, threats always refer to potentially harm to physical assets.

  • True
  • False

Answer: False

Explanation: In project management, threats refer to any identified potential occurrences, that may harm or hinder the project’s success. This doesn’t necessarily mean physical harm or loss.

Select the tools that can be used to identify and prioritize threats and opportunities.

  • A. SWOT analysis
  • B. PERT charts
  • C. Risk register
  • D. Fishbone diagrams

Answer: A, C, D

Explanation: Both SWOT analysis, Risk register and Fishbone diagrams are tools used to identify and prioritize project threats and opportunities. PERT charts are used to schedule and coordinate tasks within a project.

True or False: Opportunities are only future events that have a positive impact on project objectives.

  • True
  • False

Answer: True

Explanation: In project management, opportunities are potential future events that would have a beneficial impact on the project objectives, such as cost, schedule, or performance.

In terms of project management, an external threat can be defined as:

  • A. A threat that comes from within the project team
  • B. A threat originating from outside the project
  • C. A high priority threat
  • D. A very unlikely threat

Answer: B

Explanation: In the context of project management, an external threat is a potential negative event that is originating from outside the project.

In Risk Management, opportunities are also referred to as:

  • A. Vulnerabilities
  • B. Weaknesses
  • C. Positive risks
  • D. Challenges

Answer: C

Explanation: In Risk Management, opportunities are often referred to as positive risks as they can result in a positive impact on the project if they occur.

True or False: Threats and opportunities cannot coexist in a project.

  • True
  • False

Answer: False

Explanation: In a project, threats and opportunities can indeed coexist. Recognizing and balancing both is an essential part of effective risk management.

Which of the following are elements of a SWOT analysis?

  • A. Strengths, weaknesses, plans, threats
  • B. Strengths, weaknesses, objectives, techniques
  • C. Strengths, weaknesses, opportunities, threats
  • D. Standards, weaknesses, objectives, timings

Answer: C

Explanation: SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It is a technique used to identify and assess these four elements of a project, company, or situation.

True or False: Project risks can be both threats and opportunities.

  • True
  • False

Answer: True

Explanation: Project risks can refer to either threats, which are potential negative impacts, or opportunities, which are potential positive impacts.

The process of identifying risks, threats and opportunities is a one-time exercise.

  • A. True
  • B. False

Answer: B

Explanation: Risk identification including threats and opportunities is an ongoing process throughout the project lifecycle, not a one-time activity.

In a project context, a threat is:

  • A. Always related to the team dynamics
  • B. Always something that has already happened
  • C. An uncertainty that could potentially harm your project
  • D. Always related to project finances

Answer: C

Explanation: In a project context, a threat doesn’t refer to something that is definitely going to happen, nor is it always related to finances or team dynamics. It’s a scenario that, if it does occur, will have a detrimental effect on the project.

Probabilistic analysis of the project schedule should be used to identify and assess:

  • A. Threats
  • B. Opportunities
  • C. Both threats and opportunities
  • D. Neither threats nor opportunities

Answer: C

Explanation: Probabilistic analysis of the project schedule should be used to identify and assess both threats and opportunities in a project, as it can provide a more comprehensive overview of the potential risk landscape.

Mitigation is a strategy used for:

  • A. Threats
  • B. Opportunities
  • C. Both threats and opportunities
  • D. Neither threats nor opportunities

Answer: A

Explanation: Mitigation is a risk response strategy that is used to reduce the probability or impact of a potential negative event or threat. The goal of mitigation is to lessen the negative impact of a risk that has materialized.

Exploitation is a strategy used for:

  • A. Threats
  • B. Opportunities
  • C. Both threats and opportunities
  • D. Neither threats nor opportunities

Answer: B

Explanation: Exploitation is a risk response strategy that is used to ensure that opportunities are realized. By exploiting a risk, project managers try to make sure that the positive impact of an opportunity is realized.

True or False: Qualitative and quantitative analyses should be used in tandem to identify and prioritize threats and opportunities.

  • True
  • False

Answer: True

Explanation: Both qualitative and quantitative analyses provide different perspectives and insights into threats and opportunities. Using them in tandem allows for a more comprehensive risk profile to be developed.

True or False: In prioritizing threats and opportunities, one should consider both their likelihood and their impact.

  • True
  • False

Answer: True

Explanation: When prioritizing threats and opportunities, it is key to consider not just their likelihood, but their potential impact as well. This allows for a more balanced and effective risk assessment.

Interview Questions

What is the main objective of risk identification in project management?

The main objective of risk identification in project management is to early identify and capture potential threats and opportunities that could impact the project’s objectives.

What are the primary techniques used in risk identification?

The primary techniques used in risk identification are Brainstorming, Delphi technique, Checklist analysis, Root Cause analysis, SWOT analysis, and Expert interviews.

What does SWOT analysis stand for in risk management?

In risk management, SWOT analysis stands for Strengths, Weaknesses, Opportunities, and Threats.

What is the output of the Identify Risks process?

The output of the Identify Risks process is the Risk Register which is a document in which the results of risk analysis and risk response planning are recorded.

How would you define a threat in a project context?

A threat in a project context is a potential occurrence, either uncertain or expected that may have a negative impact on a project objective.

How would you define an opportunity in a project context?

An opportunity in a project context is a potential occurrence, either uncertain or expected, that may have a positive impact on a project objective.

How are risk events categorized?

Risk events can be categorized as known-unknowns (events that are anticipated but whose outcomes are uncertain) and unknown-unknowns (unanticipated events).

What is the importance of risk register updates?

Risk register updates are important because they help monitor identified threats and opportunities, enable tracking of agreed-upon risk response plans, and ensure risks are properly communicated across the project team and stakeholders.

What’s the difference between proactive and reactive risk management?

Proactive risk management is about anticipating risks and managing them before they affect the project, whereas reactive risk management is about dealing with risks once they occur.

In which project management process group does risk identification typically take place?

Risk identification typically takes place in the planning process group of project management.

Who is usually involved in the risk identification process?

All project team members, key stakeholders, subject matter experts, and anyone with good knowledge about the project or its environment can be involved in the risk identification process.

What tool can be used to visually represent risks in terms of their probable impact and likelihood of occurrence?

A probability and impact matrix can be used to visually represent risks in terms of their probable impact and likelihood of occurrence.

Why it’s important to revisit and update the risk register frequently?

It’s important because the risk landscape of a project evolves over time, as some risks are mitigated, new ones may emerge, and others may change in impact or probability. Regularly updating the risk register ensures the most current view of project risks.

How does risk identification contribute to project success?

By helping to identify threats and opportunities early, risk identification allows for proactive planning and response, which can reduce negative impacts and maximize positive impacts on the project’s objectives.

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