PMI PMI-RMP PMI Risk Management Professional Online Training

Question #11

A risk management professional is currently facilitating the risk planning process with the project team. To increase the breadth of considered risks, the team wants to include high-level and strategic project risks.

What should the risk management professional do next?

A . Perform a sensitivity analysis to the higher-level aggregate activities
B . Develop a risk breakdown structure (RBS) identifying the potential risk categories
C . Conduct a strengths, weaknesses, opportunities, and threats (SWOT) analysis
D . Perform a base line Monte Carlo simulation to address overall threats to project objectives

Reveal Solution Hide Solution

Question #12

A project is at the final development stage. The test lead informs the risk manager that a key feature may not be testable due to changes in the environment.

What should the risk manager do?

A . Confirm the risk triggers are still valid.
B . Ask the architect to develop acceptance criteria.
C . Review the feature with the project team.
D . Escalate the issue to the project board.

Reveal Solution Hide Solution

Question #13

A risk manager is managing risks of a mission critical application. A subject matter expert (SME) asks the risk manager to treat every single risk identified as an extremely high priority .

What should the risk manager do?

A . Ask the project sponsor if every risk in the risk register can have the same priority.
B . Mark every identified risk as an extremely high priority and any future risks as a lower priority.
C . Agree with the SME, treat every risk with equal priority, and inform all stakeholders.
D . Perform a sensitivity analysis and determine the correct priority of every identified risk.

Reveal Solution Hide Solution

Question #14

The risk manager notices that in their workshops, most of the risks identified are threats .

What should the risk manager do to increase the number of opportunities identified?

A . Use the Delphi technique involving experts who have identified opportunities in the past
B . Interview more stakeholders who have a positive mindset
C . Conduct a strengths, weaknesses, opportunities, and threats (SWOT) analysis
D . Conduct a political, economic, sociological, technological, legal, and environmental (PESTLE) analysis

Reveal Solution Hide Solution

Correct Answer: B
B

Explanation:

The risk management plan is a document that describes how risk management activities will be structured and performed on a project. It defines the roles and responsibilities, risk categories, risk appetite and thresholds, risk identification and analysis methods, risk response strategies, risk monitoring and reporting mechanisms, and risk governance mechanisms 1. The risk management plan should be aligned with the project management plan, which defines the project scope, schedule, cost, quality, and other aspects2. When an organization decides to accelerate a key project, it means that the project objectives, assumptions, constraints, and environment have changed. This will affect the risk exposure and profile of the project, as well as the risk management approach and resources. Therefore, the first action for the project risk manager to take is to revise the risk management plan to reflect the new situation and ensure that the risk management process is still effective and efficient. Revising the risk management plan may involve updating the risk categories, risk appetite and thresholds, risk identification and analysis methods, risk response strategies, risk monitoring and reporting mechanisms, and risk governance mechanisms to suit the accelerated project. The project risk manager should also communicate the revised risk management plan to the relevant stakeholders and obtain their approval and support 1. Ensuring sufficient resources are available, updating the risk register, and meeting with the project’s stakeholders are all important actions to take when accelerating a project, but they are not the first action. These actions should be done after revising the risk management plan, as they depend on the updated risk management approach and process. For example, the project risk manager may need to allocate more resources to risk management activities, identify and analyze new or changed risks, implement new or modified risk responses, and report the risk status and performance to the stakeholders based on the revised risk management plan 1.

Reference: 2, 1.

Question #15

During the monthly executive review meeting, the project sponsor would like to understand how the project team has planned to manage risks that were identified in the last meeting .

What should the project manager do?

A . Utilize a Monte Carlo assessment to provide risk related impacts.
B . React to the secondary and residual risks only if they occur.
C . Include secondary and residual risks as part of the response.
D . Transfer secondary and residual risks to the project sponsor.

Reveal Solution Hide Solution

Question #16

A project manager is trying to realize benefits from new material on an adaptive project. This is the first time the project team is using the material so the team does not have information to identify and analyze risks. A team member informs the project manager that a local university has recently published a research journal on the same material.

Where should the project manager find this information?

A . Industrial studies
B . Commercial risk databases
C . Organizational process assets (OPAs)
D . Enterprise environmental factors (EEFs)

Reveal Solution Hide Solution

Correct Answer: D
D

Explanation:

Enterprise environmental factors (EEFs) are conditions or circumstances that are not under the control of the project team, but may influence, constrain, or direct the project. EEFs include internal and external factors, such as organizational culture, market conditions, industry standards, government regulations, and academic research. In this case, the project manager should find the information about the new material from the research journal published by the local university, which is an example of an external EEF. This information may help the project manager to identify and analyze the risks associated with the new material and plan appropriate risk responses. Industrial studies, commercial risk databases, and organizational process assets (OPAs) are not the correct choices, as they are not relevant to the question. Industrial studies are systematic investigations of a specific industry or sector, which may provide general information about the market trends, opportunities, and challenges, but not specific information about the new material. Commercial risk databases are sources of information about historical or potential risks that may affect projects in different domains or regions, which may help the project manager to identify common or emerging risks, but not the risks related to the new material. OPAs are the plans, processes, policies, procedures, and knowledge bases specific to and used by the performing organization, which may help the project manager to follow the established guidelines and practices for risk management, but not to obtain new information about the new material.

Reference: PMI. (2017). A Guide to the Project Management Body of Knowledge (PMBOK® Guide) C Sixth Edition. Chapter 2: The Environment in Which Projects Operate, pp. 38-39. 5 Enterprise environmental factors (EEFs) include information from external sources, such as academic research, industry studies, and market conditions. this case, the project manager should refer to the research journal published by the local university as an EEF to gather information about the new material and its associated risks.

Question #17

A risk manager is confident that they have identified and quantified the risks and opportunities for a project.

When presenting their work to management, on what areas should the risk manager focus? (Choose two.)

A . Risks that are tied to the success of the organization
B . Risks as they apply to the organization’s overall risk management philosophy and strategic ambition
C . Huge opportunities that possibly bring an additional 30% return for 10 projects in the next year
D . Risks related to cost that will impact the major projects that are currently in the execution phase
E . Risk mitigation actions that will require work from stakeholders

Reveal Solution Hide Solution

Question #18

A mega facility development project is evaluating some options to achieve the project schedule and budget. Each option’s success is driven by multiple quantifiable factors.

What should the project manager do to evaluate and select the best option based on costs and probabilities?

A . Perform a FMECA fault tree analysis
B . Conduct a sensitivity analysis
C . Perform a decision tree analysis
D . Conduct an analytic hierarchy process

Reveal Solution Hide Solution

Correct Answer: C
C

Explanation:

A decision tree analysis is a tool that helps to evaluate and select the best option among different alternatives based on costs and probabilities. A decision tree analysis uses a graphical representation of a decision problem, where each node represents a decision point, a chance event, or an outcome. The branches of the tree show the possible choices, events, or consequences that can occur at each node. The end nodes of the tree show the expected value or payoff of each option, which is calculated by multiplying the probability and the cost or benefit of each outcome. A decision tree analysis can help to compare the expected values of different options and choose the one that maximizes the benefit or minimizes the cost 1. A decision tree analysis can also help to incorporate uncertainty and risk into the decision making process, as it shows the range of possible outcomes and their likelihoods2. Therefore, the project manager should perform a decision tree analysis to evaluate and select the best option based on costs and probabilities for a mega facility development project. Performing a FMECA fault tree analysis, conducting a sensitivity analysis, or conducting an analytic hierarchy process are not the best options to evaluate and select the best option based on costs and probabilities. A FMECA fault tree analysis is a tool that helps to identify and analyze the potential causes and effects of failures in a system or process. It uses a graphical representation of a failure event, where each node represents a basic or intermediate event that contributes to the failure. The branches of the tree show the logical relationships between the events, using AND or OR gates. A FMECA fault tree analysis can help to calculate the probability and severity of failures, as well as to prioritize and mitigate the risks3. However, a FMECA fault tree analysis does not help to compare different options or alternatives, as it focuses on a single failure scenario. Conducting a sensitivity analysis is a tool that helps to measure how the uncertainty in the input variables of a model affects the output or outcome of the model. It uses a graphical or numerical representation of the relationship between the input and output variables, showing how the output changes when the input changes. A sensitivity analysis can help to identify the most critical or influential variables, as well as to test the robustness or reliability of the model4. However, a sensitivity analysis does not help to compare different options or alternatives, as it focuses on a single model or option. Conducting an analytic hierarchy process is a tool that helps to evaluate and select the best option among different alternatives based on multiple criteria. It uses a mathematical method of pairwise comparison, where each alternative is compared to each other in terms of each criterion. The results of the comparisons are then aggregated into a matrix, which shows the relative importance or preference of each alternative. An analytic hierarchy process can help to rank the alternatives and choose the one that best satisfies the criteria5. However, an analytic hierarchy process does not help to incorporate costs and probabilities into the decision making process, as it relies on subjective judgments and preferences.

Reference: 1, 2, 3, 4, 5.

A decision tree analysis is a quantitative risk analysis technique that helps evaluate and select the best option based on costs and probabilities. It visually represents different decision paths and their associated probabilities, allowing the project manager to compare and select the most appropriate option for the project.

Question #19

When processing freight invoices for a project, the project manager notices the shipping costs exceeded the budget due to increased fuel costs. The risk manager included this risk in the project’s contingency allowance. When reviewing the project budget execution reports, the project manager notices unused budget remaining in other closed tasks of the project that could cover the additional shipping costs.

What should the project manager do?

A . Process the freight invoices at higher shipping costs against the project’s contingency allowance.
B . Request a formal change order from the customer to increase the project’s total budget.
C . Process the freight invoices for the budgeted amount and hope the shipping company will forgive the difference.
D . Ask the project sponsor to cover the additional shipping costs on the company’s reserves account.

Reveal Solution Hide Solution

Question #20

A project manager works on a long-term and high visibility project at an organization that has a low risk appetite towards this project due to its impact on the company’s business. The project sponsors follow up weekly with the project manager, who was just informed by one of the risk owners that the exposure from two high-impact risks are hitting the risk thresholds .

What should the project manager do next?

A . Update the project management plan to add contingency.
B . Perform an assumptions and constraints analysis.
C . Complete an assessment and confirm the response with the sponsors.
D . Implement mitigation measures for those risks.

Reveal Solution Hide Solution