The project team is updating the risk register with the minimum acceptable level of exposure and impact for each risk. The team also wants to determine if they have reached the maximum level of exposure before they escalate the risk.
What should the team perform in this scenario?
A. Quantitative risk analysis
B. Risk response planning
C. Monitor and control risks
D. Risk urgency assessment
Correct Answer: A
Explanation: Quantitative risk analysis helps determine the minimum acceptable level of exposure and impact for each risk. It also helps to understand if the maximum level of exposure has been reached before escalating the risk.
(Reference: PMBOK Guide, 6th Edition, p. 423)
The team should perform quantitative risk analysis, which is the process of numerically analyzing the effect of identified risks on overall project objectives. Quantitative risk analysis can help the team to establish the minimum acceptable level
of exposure and impact for each risk, as well as the maximum level of exposure before escalation. Quantitative risk analysis can also provide probabilistic estimates of project outcomes, such as cost and schedule, and support risk
prioritization and decision making. References:
PMI, A Guide to the Project Management Body of Knowledge (PMBOK Guide), Sixth Edition, 2017, p. 399; PMI, The Standard for Risk Management in Portfolios, Programs, and Projects, 2019, p. 69.
Question 532:
A project team identified some risks in a project. Team members became interested in predicting the outcomes of their potential choices following their probability of occurrence.
Which technique should the risk manager use?
A. Political, economic, social, technological, legal, and environmental (PESTLE) analysis
B. Strengths, weaknesses, opportunities, and threats (SWOT) analysis
C. Decision tree analysis
D. Cost-benefit analysis
Correct Answer: C
Question 533:
A project's design has been completed and approved on time. The construction subcontractor should be mobilizing to start construction but does not have the necessary materials in place, causing a delaying in the project. The risk register only contains risks for the design phase of the project.
What should the project manager have done differently?
A. Executed the Monte Carlo sensitivity analysis prior to mobilization
B. Added generic construction risks to the risk register before construction began
C. Reviewed the assumptions/exclusions register in the project charter
D. Performed risk identification exercises for the full lifecycle of the project
Correct Answer: D
Explanation: The project manager should have performed risk identification exercises for the full lifecycle of the project, including the construction phase, to ensure that all potential risks were identified and addressed in the risk register. Risk identification is the process of determining the risks that may affect the project and documenting their characteristics. Risk identification should be performed throughout the project lifecycle, as new risks may emerge or change over time. Risk identification should also consider all aspects of the project, such as scope, schedule, cost, quality, resources, stakeholders, and procurement. By performing risk identification exercises for the full lifecycle of the project, the project manager could have identified and planned for the potential risks associated with the construction phase, such as delays, material shortages, quality issues, or safety hazards. This would have helped to prevent or mitigate the impact of the risk event that occurred, and to ensure that the risk register is updated and comprehensive. Performing a Monte Carlo sensitivity analysis, adding generic construction risks, or reviewing the assumptions/exclusions register are not sufficient or effective ways of identifying the specific risks that may affect the project during the construction phase. These are either tools for risk analysis, risk response planning, or project initiation, but not risk identification. References: PMI-RMP Certification Handbook1, page 9; PMBOK Guide, pages 397-398.
Question 534:
Several key stakeholders approach the project manager with concerns. The stakeholders have received feedback from local businesses that have reported a reduction in customers because of construction activities at the worksite, and they plan to submit a claim to the municipality to fine the project manager's company.
How should the project manager address this concern?
A. Evaluate the risk with the team and update the issueing
B. Discuss the concern with the local business owners.
C. Update the key risks and perform a quantitative risk analysis.
D. Adjust construction work hours to after business hours.
Correct Answer: A
Explanation: The project manager should evaluate the risk with the team and update the issueing to address the concerns of the stakeholders and local businesses. This concern is a potential risk that could affect the project's reputation, stakeholder satisfaction, and profitability. The project manager should evaluate the risk with the team and update the issue log, which is a tool for documenting and monitoring the resolution of issues that arise during the project. The issue log should include information such as the issue description, the priority, the owner, the status, and the actions taken. The project manager should also communicate with the stakeholders and the local businesses to address their concerns and seek a mutually beneficial solution. The project manager should not ignore the concern, as it could escalate into a bigger problem. The project manager should not discuss the concern with the local business owners alone, as this could bypass the stakeholders and create more conflicts. The project manager should not update the key risks and perform a quantitative risk analysis, as this is a time-consuming and complex process that may not be necessary for this type of risk. The project manager should not adjust the construction work hours to after business hours, as this could incur additional costs, disrupt the project schedule, and affect the workers' safety and productivity. References: PMI, 2017. A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition. Newtown Square, PA: Project Management Institute, Inc., pp. 115-116, 408-4091
Question 535:
A risk manager is assigned to a new system deployment project with a strict contractually agreed-on schedule. One of the key risks identified is the availability of experts because many are shared on other strategic projects in the organization.
What should the risk manager do to address this situation?
A. Implement a disciplined tracking method and report to stakeholders accordingly.
B. Call for a project team meeting to review risk strategies and make required adjustments.
C. Escalate the staffing topic to the sponsor and request more budget for contingencies.
D. Revisit the project charter for scope adjustments and sign them off with the customer.
Correct Answer: B
Explanation: According to the PMI Risk Management Professional (PMI-RMP) Examination Content Outline1, one of the tasks in the domain of Risk Response is to call for a project team meeting to review risk strategies and make required adjustments, as needed, based on risk monitoring and reporting1. In this scenario, the risk manager should do this to address the situation of the availability of experts, which is a key risk for the project. The project team meeting will help the risk manager and the project team to evaluate the effectiveness of the current risk response plan, identify any new risks or changes in existing risks, and develop alternative risk strategies and actions to deal with the staffing issue. The project team meeting will also facilitate the communication and collaboration among the project team members and other stakeholders, and ensure that the project objectives and expectations are aligned. The risk manager should not implement a disciplined tracking method and report to stakeholders accordingly, because that is not a proactive risk response strategy, but rather a passive risk monitoring and reporting technique2. The risk manager should not escalate the staffing topic to the sponsor and request more budget for contingencies, because that is not a feasible or appropriate risk response strategy, as it does not address the root cause of the risk or provide a solution to the problem3. The risk manager should not revisit the project charter for scope adjustments and sign them off with the customer, because that is not a risk response strategy, but rather a scope management process that may have negative impacts on the project quality, cost, and schedule, and may violate the contractual agreement with the customer4. References: 1: PMI Risk Management Professional (PMI- RMP)?Examination Content Outline, page 102: A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition, page 4563: A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition, page 4364: A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition, page 133.
Question 536:
A project manager wants to introduce a new technology to improve a project's performance. However, there are some costs associated that are beyond the current budget, and the proposed technology has not been applied to any previous company projects.
What should the project manager do in this situation?
A. Escalate this initiative to project decision makers and sponsors.
B. Accept the fact that there is a risk associated with this new technology.
C. Take advantage of this opportunity of Improving the project performance.
D. Outsource the implementation of the new technology as soon as possible.
Correct Answer: C
The project manager should escalate this initiative to project decision makers and sponsors, as they have the authority to approve changes in budget and scope. They can evaluate the potential benefits and associated with the new technology and make an informed decision on whether to proceed. According to the PMBOK Guide1, an opportunity is a risk that would have a positive effect on one or more project objectives if it occurs. Opportunities are uncertain events or conditions that can enhance or facilitate the achievement of project goals, such as cost savings, schedule acceleration, quality improvement, or scope expansion. A project manager should take advantage of opportunities by implementing risk responses that seek to maximize their probability and/or positive impact. In this case, the project manager wants to introduce a new technology to improve the project's performance, which is an opportunity for the project. The project manager should take advantage of this opportunity by planning and executing appropriate risk responses, such as exploiting, enhancing, sharing, or accepting the opportunity. This is part of the Plan Risk Responses and Implement Risk Responses processes in the PMBOK Guide1. References: 1: A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition.
Question 537:
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.
Correct Answer: D
Explanation: The risk manager should perform a quantitative risk analysis to determine the potential impact of risks on the project's completion date. This will help in providing a more accurate project completion date to the customer, considering the risks and their potential effects on the project schedule.
According to the PMI Risk Management Professional (PMI-RMP) Examination Content Outline1, one of the tasks in the domain of Risk Analysis is to perform quantitative risk analysis using techniques such as Monte Carlo simulation, decision tree analysis, sensitivity analysis, etc., to quantify the possible outcomes for the project and their probabilities, and to evaluate the cost and schedule impacts of risks1. In this scenario, the risk manager should perform a quantitative risk analysis and update the results, because the project costs have increased significantly and the customer has imposed a strict deadline for the project completion. A quantitative risk analysis will help the risk manager to estimate the probability of meeting the project objectives, such as cost and schedule, and to determine the appropriate contingency reserves for the project. A quantitative risk analysis will also provide more accurate and reliable information for the customer and the project team, and will support the risk response planning process2. References: 1: PMI Risk Management Professional (PMI-RMP) Examination Content Outline, page 92: A Guide to the Project Management Body of Knowledge (PMBOK Guide) Sixth Edition, pages 431-432.
Question 538:
A risk manager of a major project facilitates a meeting to develop the risk management plan. What two factors does the risk manager need to consider to ensure an effective risk management plan is developed? (Choose two.)
A. Applying modern risk management techniques.
B. Aligning to project constraints and priorities.
C. Ensuring risk response strategies mitigate all risks.
D. Minimizing implementation costs.
E. Obtaining stakeholder acceptance
Correct Answer: BE
Explanation: To ensure an effective risk management plan, the risk manager needs to consider aligning the plan to project constraints and priorities and obtaining stakeholder acceptance, as these factors will help ensure that the plan is relevant and supported by the project team and stakeholders. According to the PMI-RMP Handbook, the risk management plan is a document that describes how risk management activities will be structured and performed on the project. It is one of the main outputs of the Plan Risk Management process. The risk management plan should consider the following factors to ensure its effectiveness: Aligning to project constraints and priorities: The risk management plan should be aligned with the project objectives, scope, schedule, cost, quality, resources, and stakeholder expectations. It should also reflect the project's risk appetite, tolerance, and threshold levels, which indicate the degree of uncertainty that the project can accept. The risk management plan should prioritize the risk management activities based on the project's critical success factors and key performance indicators. Obtaining stakeholder acceptance: The risk management plan should be developed with the involvement and input of key stakeholders, such as the project sponsor, customer, team members, subject matter experts, and other relevant parties. The risk management plan should be communicated and approved by the stakeholders to ensure their commitment and support for the risk management process. The risk management plan should also define the roles and responsibilities of the stakeholders in risk management, as well as the reporting and escalation mechanisms. The other options are not valid factors for ensuring an effective risk management plan: Applying modern risk management techniques: The risk management plan should apply the appropriate risk management techniques that suit the project's context, complexity, and characteristics. The techniques should be based on the best practices and standards of the profession, such as the PMBOK Guide and the Practice Standard for Project Risk Management. The techniques do not have to be modern or innovative, as long as they are effective and efficient. Ensuring risk response strategies mitigate all risks: The risk management plan should define the risk response strategies that will be used to address the identified risks. However, the risk response strategies do not have to mitigate all risks, as some risks may be accepted, transferred, or avoided. The risk response strategies should be based on the risk analysis and evaluation, which consider the probability and impact of the risks, as well as the cost and benefits of the responses. Minimizing implementation costs: The risk management plan should consider the budget and resources available for the risk management activities. However, the risk management plan should not aim to minimize the implementation costs at the expense of the quality and effectiveness of the risk management process. The risk management plan should balance the costs and benefits of the risk management activities, and ensure that they provide value to the project. References: PMI-RMP Handbook1, PMBOK Guide2, Practice Standard for Project Risk Management2
Question 539:
A project team has just initiated a large project to move an organization's headquarters to another location. The risk manager has scheduled a risk identification session but notices that the project charter, work breakdown structure (WBS). and scope statement are not available.
What should the risk manager consider?
A. Aligning with the project manager to hold an open brainstorm session with all stakeholders will suffice.
B. The ideal solution is to find alternate documents that provide good visibility on the environment.
C. The risk identification process can be carried out as long as the project statement is available.
D. Risk evaluation will be challenging without these elements as a frame of reference.
Correct Answer: D
Explanation: According to the PMI-RMP ontent Outline1, one of the tasks in the domain of risk identification is to "review project documents, assumptions, and constraints, and understand the project environment and organizational factors to identify risks". The project charter, work breakdown structure (WBS), and scope statement are essential project documents that provide information about the project objectives, deliverables, requirements, assumptions, and constraints. Without these elements, the risk manager will have difficulty identifying and evaluating the risks that may affect the project. Therefore, the best answer is D. References: 1: PMI-RMP ontent Outline, page 7.
Question 540:
A risk manager faces resistance as they try to implement the project's risk strategy. Some members of the project team believe it is a waste of time and money, What should the risk manager do?
A. Continue to implement the risk strategy
B. Meet with team members to address their concerns.
C. Reduce the number of risk management activities.
D. Raise the concerns with the project sponsor,
Correct Answer: B
Explanation: When facing resistance from team members, the risk manager should engage in open communication to address their concerns and clarify the importance of risk management in the project.
According to the PMBOK Guide, 6th edition, Chapter 11: Project Risk Management1, the risk manager should handle this situation by meeting with team members to address their concerns. This is because:
Resistance to risk management is a common challenge that can hinder the effectiveness and efficiency of the risk management process. Resistance can stem from various factors, such as lack of awareness, understanding, commitment,
trust, or support for risk management; fear of negative consequences or blame; competing priorities or interests; or cultural differences or biases. Meeting with team members to address their concerns is a proactive and constructive way to
overcome resistance and foster a positive risk culture within the project. By meeting with team members, the risk manager can:
The other options are not effective in handling this situation because:
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