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Hot Topics PMP Exam Flashcards > Risk and Issues > Flashcards

Risk and Issues Flashcards

1
Q

What is risk management?

A

The process of identifying, evaluating, and planning responses to uncertain events that might occur during the course of a project

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2
Q

What is on a watch list?

A

Risks that currently do not warrant planned risks responses, but it is understood that any of these risks could become more probable and need a planned response

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3
Q

Who is a risk owner?

A

An individual who watches out for the occurrence of an assigned risk and leads the implementation of preplanned responses

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4
Q

What is an opportunity in risk management?

A

A risk event that has a positive impact to deliver even more value to the organization and customer than planned

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5
Q

What is a spike?

A

A short iteration dedicated to explore an issue or an approach

Often used to explore big risks like new processes or technology

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6
Q

What are the two types of spikes?

A

Architectural spikes
Risk-based spikes

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7
Q

What is the purpose of fast failure?

A

The earlier failure occurs the quicker resources can be diverted to a different strategy on a project, or even to a different project

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8
Q

According to the Process Groups model, what processes are involved in risk management?

A

Plan Risk Management
Identify Risks
Perform Qualitative Risk Analysis
Perform Quantitative Risk Analysis
Plan Risk Responses
Implement Risk Responses
Monitor Risks

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9
Q

Name the factors to consider when assessing risk.

A

The probability that a risk event will occur (how likely)

The range of possible outcomes (impact or amount at stake)

Expected timing for it to occur in the project life cycle (when)

The anticipated frequency of risk events from that source (how often)

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10
Q

Define risk appetite.

A

A general, high-level description of the acceptable level of risk to an individual or organization

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11
Q

Define risk threshold.

A

The specific point at which risk becomes unacceptable

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12
Q

What are the desired outcomes of risk management?

A

Internal and external environmental factors are considered.

Risk and responses address the inherent uncertainty and complexity on projects.

Risk related to all possible variables and constraints are accounted for.

Issues are eliminated with risk response plans.

Risks are reviewed in every meeting, triggers are monitored, and risks are addressed before they happen.

There is normally a plan in place to deal with risk events.

Risk management helps to limit cost, time, and resource investments on the project.

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13
Q

Describe the difference between qualitative and quantitative risk analysis.

A

Qualitative risk analysis is a subjective evaluation and the numbers used to rate each risk are usually based on a scale of 1-5 or 1-10

Quantitative risk analysis is a more objective evaluation and the rating of each risk is based on an estimate of the actual probability and the actual monetary value at stake (impact)

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14
Q

What may be included in the risk management plan?

A

Risk strategy
Methodology
Roles and responsibilities
Funding
Timing
Risk categories
Stakeholder risk appetite/thresholds
Definitions of probability and impact
Reporting
Tracking

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15
Q

What is a risk breakdown structure?

A

A hierarchical chart that can help identify and document risk categories

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16
Q

What are the risk categories related to project constraints?

A

Schedule
Cost
Quality
Scope
Resources
Customer satisfaction

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17
Q

What does risk data quality assessment show?

A

Accuracy and reliability of a risk to determine if it is valid and whether more research is needed to understand it

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18
Q

What is the main artifact that results from the Identify Risks process?

A

Risk register

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19
Q

What are some examples of risk identification techniques?

A

Brainstorming
Checklist analysis
Interviewing
Root cause analysis
Assumption analysis
Constraint analysis
SWOT analysis
Documentation reviews

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20
Q

What is a project pre-mortem?

A

A facilitated team exercise that aims to identify the possible failure points on a project before they happen

21
Q

What steps are typically involved in a project pre-mortem?

A
  1. Imagine the failure
  2. Generate reasons for the failure
  3. Consolidate the list
  4. Revisit the plan
22
Q

Name methods used for the Perform Qualitative Risk Analysis process.

A

Risk management quality assessment
Risk categorization
Probability and impact matrix
Risk parameters assessment

23
Q

What does quantitative risk analysis determine?

A

Which risk events warrant a response plan and which require the most attention

Overall project risk (risk exposure)

The quantified probability of meeting project objectives

24
Q

What tools can a project manager use to determine quantitative probability and impact?

A

Expert judgment from the team and risk specialists
Data-gathering techniques, such as interviewing
Data analysis techniques, such as sensitivity analysis and decision tree analysis
Interpersonal and team skills
Cost and schedule estimating
Use of historical records from previous projects

25
Q

What is sensitivity analysis?

A

A technique to analyze and compare the potential impacts of identified risks

26
Q

What is the formula for expected monetary value?

A

Probability times impact, or
EMV = P × I

27
Q

What is the purpose of a decision tree?

A

To model all the possible choices to resolve an issue

28
Q

What are the possible risk response strategies for threats?

A

Avoid: Eliminate the threat by eliminating its cause

Mitigate: Reduce the probability or impact of the threat

Transfer: Make another party responsible for the risk (outsourcing, insurance, warranties, bonds, guarantees)

Escalate: Move the threat to the program or portfolio level

Accept:
Passive acceptance—do nothing; if it happens, it happens
Active acceptance—develop contingency plans in advance

29
Q

What are the possible risk response strategies for opportunities?

A

Exploit: Make sure the opportunity occurs
Enhance: Increase probability or positive impact of the risk event
Share: Allocate full or partial ownership of the opportunity to a third party
Escalate: Move the opportunity to the program or portfolio level
Accept: Do nothing; if it happens, it happens

30
Q

What key outputs of the Plan Risk Responses process are added to the risk register?

A

Residual risks
Contingency plans
Fallback plans
Risk owners
Secondary risks
Risk triggers
Contracts
Reserves (contingency and management)

31
Q

What is communicated in a risk report?

A

The risks of greatest threat or opportunity, overall project risk exposure, anticipated changes, and anticipated outcomes of planned risk responses

32
Q

What is a pure risk?

A

An insurable risk, such as fire, theft, property damage

33
Q

What are residual risks?

A

The risks that remain after risk response planning

34
Q

What are secondary risks?

A

New risks created by the implementation of risk response strategies

35
Q

What is the difference between a contingency plan and a fallback plan?

A

A contingency plan describes the specific actions that will be taken if the opportunity or threat occurs

A fallback plan describes specific actions that will be taken if the contingency plans are not effective

36
Q

What are risk triggers?

A

Events that trigger contingency responses

They let risk owners know when to take action

37
Q

What is a risk-adjusted backlog?

A

A backlog that is prioritized for the risk responses that have been developed for identified risks

38
Q

Describe set-based design.

A

Exploring multiple options, or designs, early in the project and eliminating the ones that won’t work

It creates flexibility and allows teams to develop knowledge as they work through the different options

39
Q

What are workarounds?

A

Unplanned responses developed to deal with the occurrence of unanticipated events or problems on a project (or to deal with risks that had been accepted because of unlikelihood of occurrence and/or minimal impact)

40
Q

What can a contingency reserve be used for?

A

To handle the impact of the specific risk for which it was set aside

41
Q

What is technical performance analysis?

A

Uses project data to compare planned versus actual completion of technical requirements to determine if there is any variance from what was planned

42
Q

What happens during a risk reassessment?

A

The team reviews the risk management plan and risk register and adjusts the documentation as required

43
Q

What is a risk review?

A

A regular review to discuss the effectiveness of planned risk responses that have been implemented on the project

They may result in the identification of new risks, secondary risks created by risk response plans, and risks that are no longer applicable

44
Q

What are risk audits?

A

Assessments of the overall process of risk management on the project

45
Q

What agile tools allow for ongoing monitoring and controlling for risk?

A

Retrospectives and risk burndown charts

46
Q

What is the purpose of technical performance analysis?

A

Compares planned versus actual completion of technical requirements to determine if there is any variance from what was planned

Any variance could indicate possible risks to the project, either opportunities or threats

47
Q

What artifacts result from the Monitor Risks process?

A

Change requests
Project management plan updates
Project document updates (includes the risk register)
Work performance information
Organizational process assets updates

48
Q

What key outputs of the Monitor Risks process are added to the risk register?

A

Outcomes of risk reassessments and risk audits
Results of implemented risk responses
Updates to previous parts of risk management
Closing of risks that are no longer applicable
Details of what happened when risks occurred
Lessons learned

Hot Topics PMP Exam Flashcards (15 decks)

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