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Question #41

Towards the end of definitive design, project costs have increased to the point where it will be classified as a capital asset project. The customer has expressed they want one final total project completion date and will afford no extensions after it is established .

How should the risk manager proceed?

A . Perform a qualitative risk analysis and update the results.
B . Update the assumptions/exclusions register with the new information.
C . Update the risk register and prepare for the Monte Carlo analysis.
D . Perform a quantitative risk analysis and update the results.

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Question #42

The project manager is reviewing the lessons learned from a previous similar project. The previous project was delayed due to the delay in delivery of a gas turbine generator (GTG). Construction of the previous project had to be shut down unexpectedly to wait for the late delivery of the GTG .

What should the project manager do first?

A . Include the risk in the register and communicate with the stakeholders.
B . Communicate with the client to provide the previous shutdown plan.
C . Review and update the project schedule.
D . Interview the other project manager to learn more details.

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Question #43

The project manager and the risk manager of a new project to develop an application to support autonomous driving are meeting with the sponsor and key stakeholders to discuss the project. During the meeting, it is identified that the transport authority is discussing new traffic regulations for the industry that could be in place before the project ends.

How should the project manager and the risk manager handle this situation?

A . Ensure the project complies with the current traffic regulations and laws.
B . Send a letter to the traffic authority with the general project information.
C . Perform inquiries on the website of the traffic authority weekly.
D . Meet with the traffic authority staff in charge of the new regulation.

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Correct Answer: D
D

Explanation:

Meeting with the traffic authority staff responsible for the new regulation allows the project manager and risk manager to understand the potential changes and their impact on the project. This will help them proactively address any potential issues and ensure the project complies with the new regulations.

According to the PMBOK Guide, 6th edition, Chapter 11: Project Risk Management1, the project manager and the risk manager should handle this situation by meeting with the traffic authority staff in charge of the new regulation.

This is because:

The new traffic regulation is an external risk that could affect the project objectives, such as scope, schedule, cost, quality, and customer satisfaction. External risks are those that arise from outside the project boundaries and are beyond the control of the project team. Examples of external risks include changes in government policies, regulations, laws, market conditions, environmental factors, etc.

The project manager and the risk manager should proactively engage with the external stakeholders who have the power and influence to create or modify the external risks. By meeting with the traffic authority staff, they can establish a positive relationship, gain insights into the new regulation, and influence its development to align with the project needs. They can also obtain information on the probability and impact of the risk, as well as the potential response strategies.

The other options are not effective in handling this situation because:

Ensuring the project complies with the current traffic regulations and laws does not address the risk of the new regulation that could change the project requirements, scope, or deliverables. It also does not help the project team to prepare for the possible changes and mitigate their negative effects. Sending a letter to the traffic authority with the general project information does not establish a direct and timely communication channel with the external stakeholder. It also does not provide enough details or feedback to understand the nature and implications of the new regulation. Performing inquiries on the website of the traffic authority weekly does not allow the project team to influence the development of the new regulation or obtain reliable and updated information. It also does not enable the project team to build trust and rapport with the external stakeholder.

Reference: PMBOK Guide, 6th edition, Chapter 11: Project Risk Management1 Risk Management Professional (PMI-RMP) ® Exam Cert Guide2

Question #44

A project manager wants to work on understanding the project risks. The project manager works with the integrated project team to develop the risk handling strategies for the identified risks .

How should the project manager work with these risk handling strategies?

A . Review and revise the strategies periodically.
B . Implement the strategies after completing the risk analysis.
C . Implement the strategies immediately.
D . Ensure the strategies are approved by the stakeholders.

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Correct Answer: A
A

Explanation:

Risk handling strategies should be reviewed and revised periodically to ensure they remain effective and relevant as the project progresses. This allows the project manager to adapt to changing circumstances and minimize the impact of risks on the project.

According to the PMBOK® Guide, risk handling strategies are the specific actions that are taken to implement the risk response plan. The risk response plan is the output of the Plan Risk Responses process, which describes how the project team intends to address the identified risks. The risk handling strategies should be aligned with the risk response strategies, which are the general approaches to deal with the risks, such as avoid, transfer, mitigate, accept, exploit, share, enhance, or accept.

The project manager should work with the risk handling strategies by reviewing and revising them periodically. This is because the project risks are not static, but dynamic and uncertain. They may change over time due to various factors, such as changes in the project scope, schedule, cost, quality, resources, stakeholder expectations, assumptions, constraints, etc. Therefore, the project manager should monitor and control the risk handling strategies to ensure that they are still effective and appropriate for the current risk situation. The project manager should also update the risk register and the risk report with the results of the risk handling strategies, such as the residual risks, secondary risks, and risk triggers.

The other options are not valid for how the project manager should work with the risk handling strategies:

Implement the strategies after completing the risk analysis: This is not a valid option because the risk analysis is not the final step in the risk management process. The risk analysis is part of the Perform Qualitative Risk Analysis and Perform Quantitative Risk Analysis processes, which come after the Identify Risks process and before the Plan Risk Responses process. The risk analysis helps the project manager to prioritize and evaluate the risks, but it does not provide the specific actions to address them. The risk handling strategies are developed in the Plan Risk Responses process, which comes after the risk analysis.

Implement the strategies immediately: This is not a valid option because the risk handling strategies should not be implemented without proper planning and approval. The risk handling strategies should be documented in the risk response plan, which should be communicated and approved by the project sponsor, customer, and other relevant stakeholders. The risk handling strategies should also be integrated with the other project management plans, such as the scope, schedule, cost, quality, resource, communication, procurement, and stakeholder management plans. The risk handling strategies should be implemented only when the risk triggers or conditions occur, or when the project manager decides to do so based on the risk analysis and evaluation.

Ensure the strategies are approved by the stakeholders: This is not a valid option because the approval of the risk handling strategies is not the only thing that the project manager should do with them. The approval of the risk handling strategies is part of the Plan Risk Responses process, which comes before the Implement Risk Responses and Monitor Risks processes. The project manager should also implement, monitor, and control the risk handling strategies to ensure that they are effective and appropriate for the current risk situation.

Reference: PMBOK® Guide1, Risk Management Professional (PMI-RMP) ® Cert Guide1

Question #45

A project manager has determined that an activity is too complex to complete internally so they hire a licensed contractor to complete the work .

What is the project manager performing in this situation?

A . Risk mitigation
B . Risk transfer
C . Risk acceptance
D . Risk avoidance

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Question #46

During a meeting to develop the risk management plan, the risk manager recognizes that risks may be identified that could also impact other projects that the company is pursuing .

What should the risk manager do?

A . Contact the risk managers of the other projects and inform them
B . Include an escalation process in the risk management plan
C . Take note of the extensive impact of these risks in the risk register
D . Address the unique characteristics of these risks on a case-by-case basis

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Question #47

The project manager for project X was expecting the mobilization of critical equipment from another project, project Y. However, a day before the mobilization was scheduled, another project manager notifies project X’s project manager that the equipment would not be available for at least another month due to delayed activities for project Y. This has jeopardized meeting a critical milestone for project X.

How should project X’s project manager avoid this situation in the future?

A . Prepare a contingency response plan to implement when delays occur
B . Ask the other project manager to officially confirm the new date in writing
C . Request that the other project manager be added to relevant reports
D . Request that the other project manager inform if any additional delays are expected

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Correct Answer: A
A

Explanation:

A contingency response plan helps the project manager to be prepared for unexpected situations, such as delays in equipment mobilization. This plan should outline alternative actions to take in case of such delays, minimizing the impact on the project.

According to the PMBOK® Guide, a contingency response plan is a predefined action that the project team will take if an identified risk event occurs. It is part of the risk response plan, which is the output of the Plan Risk Responses process. The contingency response plan helps the project team to reduce the impact of the risk event on the project objectives, such as scope, schedule, cost, and quality. The contingency response plan should be documented in the risk register, along with the risk triggers, the assigned risk owners, and the allocated contingency reserves.

The project manager for project X should prepare a contingency response plan to avoid the situation of being dependent on the availability of critical equipment from another project, project Y. This is because the equipment mobilization is an external dependency, which is a type of inter-project dependency that occurs when a project relies on another project for a deliverable or resource. Inter-project dependencies are a source of risk for the project, as they may cause delays, conflicts, or changes in the project scope or quality. The project manager should identify, analyze, and monitor the inter-project dependencies, and plan appropriate risk responses to deal with them.

The contingency response plan for the equipment mobilization could include alternative sources of equipment, such as renting, purchasing, or borrowing from other projects or vendors. The contingency response plan could also include schedule adjustments, such as fast-tracking, crashing, or re-sequencing the activities that require the equipment. The contingency response plan should be implemented when the risk trigger occurs, such as the notification of the delay from the other project manager. The project manager should also communicate the contingency response plan to the relevant stakeholders, such as the project sponsor, customer, team members, and other project managers.

The other options are not valid for avoiding the situation in the future:

Ask the other project manager to officially confirm the new date in writing: This is not a valid option because it does not address the root cause of the problem, which is the dependency on the equipment from another project. Asking for a confirmation in writing may help to document the issue and track the progress, but it does not prevent the situation from happening again. The project manager should plan for the possibility of delays or changes in the equipment availability, and not rely on the other project manager’s promises or commitments.

Request that the other project manager be added to relevant reports: This is not a valid option because it does not address the root cause of the problem, which is the dependency on the equipment from another project. Adding the other project manager to the relevant reports may help to improve the communication and coordination between the projects, but it does not prevent the situation from happening again. The project manager should plan for the possibility of delays or changes in the equipment availability, and not rely on the other project manager’s information or updates.

Request that the other project manager inform if any additional delays are expected: This is not a valid option because it does not address the root cause of the problem, which is the dependency on the equipment from another project. Requesting the other project manager to inform if any additional delays are expected may help to anticipate and prepare for the impact, but it does not prevent the situation from happening again. The project manager should plan for the possibility of delays or changes in the equipment availability, and not rely on the other project manager’s forecasts or estimates.

Reference: PMBOK® Guide1, Project interdependency management2, Interdependencies among projects in project portfolio management3, Mastering PMI-RMP Domains, Tasks, and Enablers for Effective Risk4

Question #48

An organization performs an annual strategies and initiatives workshop during which a strengths, weaknesses, opportunities, and threats (SWOT) analysis is being conducted. As part of this process the functional managers identify the opportunities and threats .

What should the risk manager do next?

A . Add only the threats to the risk register
B . Utilize different tools to identify the risks
C . Plan risk responses to the threats
D . Update the risk register with the identified risks

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Correct Answer: D
D

Explanation:

The risk manager should update the risk register with both the opportunities and threats identified during the SWOT analysis. This will help in tracking and managing all potential risks throughout the project lifecycle.

Update the risk register with the identified risks Comprehensive and Detailed Explanation

According to the PMI Risk Management Professional (PMI-RMP) ® Examination Content Outline1, one of the tasks in the domain of Risk Identification is to update the risk register with identified risks, causes, categories, and potential responses 1. A risk register is a document used to track and report on project risks and opportunities throughout the project’s life cycle2. In this scenario, the risk manager should update the risk register with the identified risks, both opportunities and threats, that result from the SWOT analysis. The risk manager should also include the causes, categories, and potential responses for each risk, as well as other relevant information such as probability, impact, priority, owner, etc. The risk manager should not add only the threats to the risk register, because opportunities are also a type of risk that can have a positive effect on the project objectives and should be recorded and managed accordingly3. The risk manager should not utilize different tools to identify the risks, because the SWOT analysis is a valid and useful tool for risk identification and there is no indication that it was insufficient or inappropriate for the project context4. The risk manager should not plan risk responses to the threats, because that is a separate process that comes after risk identification and requires further analysis and evaluation of the risks5.

Reference: 1: PMI Risk

Management Professional (PMI-RMP) ® Examination Content Outline, page 82: Risk Register in Project Management – Project Management Academy63: A Guide to the Project Management Body of Knowledge (PMBOK® Guide) C Sixth Edition, page 3974: How to Perform a SWOT Analysis C Project Risk Coach25: A Guide to the Project Management Body of Knowledge (PMBOK® Guide) C Sixth Edition, page 440.

Question #49

The project manager has completed four projects all with similar scope. The project manager has recently been assigned to start on a new project and believes some risks may occur again on this project.

What should the project manager do?

A . Implement the risk response strategies into the risk plan.
B . Inform the sponsor that these risks should be added according to experience.
C . Add the risks to the risk register and determine a contingency.
D . Discuss and evaluate the identified risks with the project team.

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Question #50

During project planning, a risk is identified for which the risk manager has defined a mitigation strategy. Later during project execution, this risk still leaves substantial residual risk.

What should the risk manager do to handle this situation?

A . Revisit this risk in the risk register and redefine the mitigation strategy.
B . Activate the contingency plan to handle this risk during execution.
C . Mark this new risk as an extremely high priority and inform all stakeholders.
D . Ask the project sponsor for more budget to deal with this risk.

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Correct Answer: C
C

Explanation:

If a risk still leaves substantial residual risk after implementing the mitigation strategy, the risk manager should revisit the risk register and redefine the mitigation strategy to reduce the residual risk to an acceptable level.

According to the PMBOK Guide, 6th edition, Chapter 11: Project Risk Management1, an effect of adding the correlation to the Monte Carlo schedule risk analysis model is that it increases the standard deviation of the model. This is because:

Correlation is the statistical relationship between two or more variables. In a schedule risk analysis, correlation can be used to model the dependency between the durations of different activities.

For example, if two activities are positively correlated, it means that if one activity takes longer than expected, the other activity is also likely to take longer than expected. Conversely, if two activities are negatively correlated, it means that if one activity takes longer than expected, the other activity is likely to take shorter than expected.

A Monte Carlo schedule risk analysis is a simulation technique that uses random values for uncertain variables, such as activity durations, to generate possible outcomes for the project schedule. The simulation is repeated many times to produce a probability distribution of the project completion date and duration. The standard deviation is a measure of the variability or dispersion of the distribution. A higher standard deviation means that the distribution is more spread out and less predictable.

Adding correlation to the Monte Carlo schedule risk analysis model increases the standard deviation of the model because it introduces more variability and uncertainty to the simulation. Correlated activities can have a cumulative effect on the project schedule, either positively or negatively, depending on the direction and strength of the correlation. This can result in more extreme outcomes for the project completion date and duration, which increase the spread of the distribution and the standard deviation.

Reference: PMBOK Guide, 6th edition, Chapter 11: Project Risk Management1 Risk Management Professional (PMI-RMP) ® Exam Cert Guide2