11 Project Risk Management Terms

Question 1

A risk response appropriate for both positive and
negative risks, but often used for smaller risks
within a project.

Answer 1

Acceptance

Question 2

Risks that have an uncertain, unclear nature, such
as new laws or regulations, the marketplace
conditions, and other risks that are nearly
impossible to predict.

Answer 2

Ambiguity risks

Question 3

A risk response to avoid the risk.

Answer 3

Avoidance

Question 4

The most common approach to risk
identification; usually completed by a project
team with subject matter experts to identify the
risks within the project.

Answer 4

Brainstorming

Question 5

These risks may have negative or positive
outcomes. Examples include using a less
experienced worker to complete a task, allowing
phases or activities to overlap, or forgoing the
expense of formal training for on-the-job
education.

Answer 5

Business risks

Question 6

A ranking approach to identify the probability
and impact by using a numerical value, from .01
(very low) to 1.0 (certain).

Answer 6

Cardinal scales

Question 7

A quick and cost-effective risk identification

approach.

Answer 7

Checklists

Question 8

The consideration of the risk ranking scores that
takes into account any bias, the accuracy of the
data submitted, and the reliability of the nature
of the data submitted.

Answer 8

Data precision

Question 9

A method to determine which of two or more
decisions is the best one. The model examines
the costs and benefits of each decision’s outcome
and weighs the probability of success for each of
the decisions.

Answer 9

Decision tree

Question 10

An anonymous method of querying experts about
foreseeable risks within a project, phase, or
component of a project. The results of the survey
are analyzed by a third party, organized, and then
circulated to the experts. There can be several
rounds of anonymous discussion with the Delphi
Technique, without fear of backlash or offending
other participants in the process. The goal is to
gain consensus on project risks within the
project.

Answer 10

Delphi Technique

Question 11

A risk response that attempts to enhance the
conditions to ensure that a positive risk event will
likely happen.

Answer 11

Enhancing

Question 12

A risk response that is appropriate for both
positive and negative risk events that may
outside of the project manager’s authority to act
upon.

Answer 12

Escalating

Question 13

The monetary value of a risk exposure based on
the risk’s probability and impact in the risk
matrix. This approach is typically used in
quantitative risk analysis because it quantifies the
risk exposure.

Answer 13

Expected monetary value (EMV)

Question 14

A risk response that takes advantage of the

positive risks within a project.

Answer 14

Exploit

Question 15

These risks are outside of the project, but directly
affect it—for example, legal issues, labor issues, a
shift in project priorities, or weather. “Force
majeure” risks call for disaster recovery rather
than project management. These are risks caused
by earthquakes, tornadoes, floods, civil unrest,
and other disasters.

Answer 15

External risks

Question 16

System or process flowcharts show the
relationship between components and how the
overall process works. These are useful for
identifying risks between system components.

Answer 16

Flowcharts

Question 17

An influence diagram charts out a decision
problem. It identifies all of the elements,
variables, decisions, and objectives and also how
each factor may influence another.

Answer 17

Influence diagrams

Question 18

These cause-and-effect diagrams are also called
fishbone diagrams and are used to find the root
cause of factors that are causing risks within the
project.

Answer 18

Ishikawa diagrams

Question 19

Low-priority risks are identified and assigned to a

watch list for periodic monitoring.

Answer 19

Low-priority risk watch list

Question 20

A risk response effort to reduce the probability

and/or impact of an identified risk in the project.

Answer 20

Mitigation

Question 21

A simulation technique that got its name from
the casinos of Monte Carlo, Monaco. The
simulation is completed using a computer
software program that can simulate a project,
using values for all possible variables, to predict
the most likely model.

Answer 21

Monte Carlo technique

Question 22

A ranking approach that identifies and ranks the
risks from very high to very unlikely or to some
other value.

Answer 22

Ordinal scales

Question 23

The performing organization can contribute to
the project’s risks through unreasonable cost,
time, and scope expectations; poor project
prioritization; inadequate funding or the
disruption of funding; and competition with other
projects for internal resources.

Answer 23

Organizational risks

Question 24

A prompt list used for risk identification. PESTLE
examines risks in the Political, Economic, Social,
Technological, Legal, and Environmental
domains.

Answer 24

PESTLE

Question 25

A matrix that ranks the probability of a risk event occurring and its impact on the project if the event does happen; used in qualitative and quantitative risk analyses.

Answer 25

Probability and impact matrix

Question 26

These risks deal with faults in the management of the project: the unsuccessful allocation of time, resources, and scheduling; unacceptable work results; and poor project management.

Answer 26

Project management risks

Question 27

These risks have only a negative outcome. Examples include loss of life or limb, fire, theft, natural disasters, and the like.

Answer 27

Pure risks

Question 28

This approach “qualifies” the risks that have been identified in the project. Specifically, qualitative risk analysis examines and prioritizes risks based on their probability of occurring and their impact on the project should they occur.

Answer 28

Qualitative risk analysis

Question 29

This approach attempts to numerically assess the probability and impact of the identified risks. It also creates an overall risk score for the project. This method is more in-depth than qualitative risk analysis and relies on several different tools to accomplish its goal.

Answer 29

Quantitative risk analysis

Question 30

An ordinal scale that uses red, amber, and green (RAG) to capture the probability, impact, and risk score.

Answer 30

RAG rating

Question 31

Risks that are expected to remain after a risk | response.

Answer 31

Residual risks

Question 32

A project risk is an uncertain event or condition that can have a positive or negative impact on the project.

Answer 32

Risk

Question 33

The systematic process of combing through the project, the project plan, the work breakdown structure, and all supporting documentation to identify as many risks that may affect the project as possible.

Answer 33

Risk identification

Question 34

A project management subsidiary plan that defines how risks will be identified, analyzed, responded to, and monitored within the project. The plan also defines the iterative risk management process that the project is expected to adhere to.

Answer 34

Risk management plan

Question 35

The agreed-upon approach to the management | of the project risk processes.

Answer 35

Risk management planning

Question 36

The individuals or entities that are responsible for monitoring and responding to an identified risk within the project.

Answer 36

Risk owners

Question 37

The risk register is a project plan component that contains all of the information related to the risk management activities. It’s updated as risk management activities are conducted to reflect the status, progress, and nature of the project risks.

Answer 37

Risk register

Question 38

The risk report explains the overall project risks and provides summaries about the individual project risks.

Answer 38

Risk report

Question 39

An audit to test the validity of the established risk | responses.

Answer 39

Risk response audit

Question 40

The level of ownership an individual or entity has | over a project risk.

Answer 40

Risk responsibilities

Question 41

The calculated score based on each risk’s probability and impact. The approach can be used in both qualitative and quantitative risk analysis.

Answer 41

Risk score

Question 42

Root cause identification aims to find out why a risk event may be occurring, the causal factors for the risk events, and then, eventually, how the events can be mitigated or eliminated.

Answer 42

Root cause identification

Question 43

New risks that are created as a result of a risk | response.

Answer 43

Secondary risks

Question 44

A quantitative risk analysis tool that examines each risk to determine which one has the largest impact on the project’s success.

Answer 44

Sensitivity analysis

Question 45

A risk response that shares the advantages of a | positive risk within a project.

Answer 45

Sharing

Question 46

SWOT analysis is the process of examining the project from the perspective of each characteristic: strengths, weaknesses, opportunities, and threats.

Answer 46

SWOT analysis

Question 47

A prompt list used in risk identification to examine the Technical, Environmental, Commercial, Operational, and Political factors of the project.

Answer 47

TECOP

Question 48

Technical risks are associated with new, unproven, or complex technologies being used on the project. Changes to the technology during the project implementation can also be a risk. Quality risks are the levels set for expectations of impractical quality and performance.

Answer 48

Technical, quality, or performance risks

Question 49

A risk response that transfers the ownership of the risk to another party. Insurance, licensed contractors, or other project teams are good examples of transference. A fee and contractual relationships are typically involved with the transference of a risk.

Answer 49

Transference

Question 50

A type of risk based on the variations that may occur in the project, such as production, number of quality errors, or even the weather.

Answer 50

Variability risks

Question 51

A prompt list used in risk identification that examines the Volatility, Uncertainty, Complexity, and Ambiguity of risk factors within the project.

Answer 51

VUCA