CHAPTER 17: RISK MANAGEMENT
(Difficulty: E = easy, M = medium, H = hard)
(E) 1. The two primary components of a risk are:
A. The event and the probability
(M) 2. Risk constitutes a lack of knowledge ____________________.
D. about the customer’s requirements
(E) 3. Which of the following is not included in risk management?
(E) 4. Proper risk management is reactive rather than proactive.
(E) 5. If there’s a 40% chance of making $1 million and a 60% chance of losing $600,000,
then the expected monetary outcome is.
(M) 6. The process that identifies, evaluates, selects and implements one or more strategies to
set risk at an acceptable level is:
D. Risk monitoring and control
(E) 7. An objective source for risk identification is:
A. Lessons learned files
(M) 8. Brainstorming, assumption analysis and WBS decomposition are techniques used for:
D. Risk handling
(M) 9. Monte Carlo simulation is a technique used as part of:
D. Risk handling
(M) 10. The probability-impact matrix is a technique used as part of:
A. Risk identification
(M) 11. Nominal work groups and the Delphi Techniques are used as part of which risk
management process?
D. Risk handling
(M) 12. An investor has a 25% chance of making $1000 if the stock market is good, and a 50%
chance of making $600 if the market is average. The investor expects to lose $800 if
the market is bad. The expected monetary value is:
D. <$400>
(E) 13. Which of the following is not considered to be an insurable risk?
A. Direct property damage
(M) 14. In which life cycle phase does the project manager have the greatest financial risk?
(i.e. amount at state)
A. Initiation/approval
(M) 15. In which life cycle phase is the total project risk generally the least?
A. Initiation/Approval
(M) 16. Assigning high, medium or low to a potential risk is part of:
A. Risk identification
B. Quantitative risk assessment
*C. Qualitative risk assessment
D. Risk response
(M) 17. A technique that uses a series of probability distributions and then transforms them
into various risks is called:
(E) 18. Which risk handling mode is a project manager using if he/she throws out one of three
D. Transfer
(M) 19. If a project manager believes in a reactive rather than proactive risk management
approach, he/she is using:
D. Transfer
(M) 20. If a project manager believes in a proactive rather than reactive risk management
approach, he / she is using:
A. Acceptance/assumption
(M) 21. If a project manager awards a firm-fixed-price contract to a supplier, he/she is using:
A. Acceptance/assumption
(M) 22. Risk mitigation or control does not eliminate a risk but seeks to reduce it without
altering the requirements.
(M) 23. During risk monitoring and control, we focus first on the risk’s trigger rather than the
risk itself.
(E) 24. Earned value measurement is a technique suitable for risk monitoring and control.
(E) 25. Risk and knowledge are inversely related.