Risk Management Practice Quiz

1. Which of the following statements best describes risk?

Uncertainty when looking to the future.

Clarity in future decisions.

Uncertainty when looking at the past.

Certainly of not suffering harm or loss.

The statement "Uncertainty when looking to the future" best describes risk because risk refers to the potential for uncertain outcomes or losses in the future. It implies that there is a level of unpredictability or unknown factors that could affect the outcome of a decision or action. Risk is often associated with the possibility of negative consequences or harm, which is why it is important to assess and manage risks in various situations.

Explanation

The statement "Uncertainty when looking to the future" best describes risk because risk refers to the potential for uncertain outcomes or losses in the future. It implies that there is a level of unpredictability or unknown factors that could affect the outcome of a decision or action. Risk is often associated with the possibility of negative consequences or harm, which is why it is important to assess and manage risks in various situations.

2. Which of the following is a quantification technique?

REPT

PERT

PET

PRET

PERT (Program Evaluation and Review Technique) is a quantification technique used in project management to analyze and evaluate the time, resources, and activities needed to complete a project. PERT involves creating a network diagram that represents the project's activities and their dependencies, estimating the time required for each activity, and calculating the critical path and project duration. This technique helps in determining the project's timeline, identifying potential bottlenecks, and making informed decisions regarding resource allocation and scheduling.

Explanation

PERT (Program Evaluation and Review Technique) is a quantification technique used in project management to analyze and evaluate the time, resources, and activities needed to complete a project. PERT involves creating a network diagram that represents the project's activities and their dependencies, estimating the time required for each activity, and calculating the critical path and project duration. This technique helps in determining the project's timeline, identifying potential bottlenecks, and making informed decisions regarding resource allocation and scheduling.

3. What are the four possible options when responding to risk?

Avoid, Transfer, Accept, Mitigate

Accept, Mitigate, Evade, Transfer

Evade, Receive, Transfer, Avoid

Mitigate, Avoid, Evade, Transfer

The four possible options when responding to risk are avoid, transfer, accept, and mitigate. Avoiding risk means taking actions to prevent the risk from occurring. Transferring risk involves shifting the responsibility for the risk to another party, such as through insurance or contracts. Accepting risk means acknowledging and tolerating the potential negative consequences of the risk. Mitigating risk involves taking actions to reduce the impact or likelihood of the risk.

Explanation

The four possible options when responding to risk are avoid, transfer, accept, and mitigate. Avoiding risk means taking actions to prevent the risk from occurring. Transferring risk involves shifting the responsibility for the risk to another party, such as through insurance or contracts. Accepting risk means acknowledging and tolerating the potential negative consequences of the risk. Mitigating risk involves taking actions to reduce the impact or likelihood of the risk.

4. Which of the following is an act of god?

Power cut

A Hurricane

McDonalds

A baby being born

An act of god refers to a natural event or disaster that is beyond human control and is not caused by human actions. Sunshine, McDonald's, and a baby being born are not considered acts of god as they are either natural occurrences or human activities. However, a hurricane is a natural disaster that is caused by atmospheric conditions and is considered an act of god because it is unpredictable and uncontrollable by humans.

Explanation

An act of god refers to a natural event or disaster that is beyond human control and is not caused by human actions. Sunshine, McDonald's, and a baby being born are not considered acts of god as they are either natural occurrences or human activities. However, a hurricane is a natural disaster that is caused by atmospheric conditions and is considered an act of god because it is unpredictable and uncontrollable by humans.

5. Identifying alternative strategies' is also knowing as a

Contingency plan

Emergency plan

Back-up plan

Incident plan

A contingency plan refers to a proactive approach of identifying alternative strategies that can be implemented in case of unexpected events or circumstances. It involves creating a backup plan to ensure the smooth continuation of operations and minimize the impact of any potential disruptions. Therefore, the correct answer for this question is "Contingency plan."

Explanation

A contingency plan refers to a proactive approach of identifying alternative strategies that can be implemented in case of unexpected events or circumstances. It involves creating a backup plan to ensure the smooth continuation of operations and minimize the impact of any potential disruptions. Therefore, the correct answer for this question is "Contingency plan."

6. Which of these is not a source of risk?

Political Risk

Technology Risk

Environmental Risk

Functional Risk

Functional risk is not a source of risk because it refers to the potential for errors or failures within an organization's internal processes, systems, or procedures. It is related to the efficiency and effectiveness of the organization's operations. On the other hand, political risk refers to the potential impact of political factors, such as changes in government policies or regulations, on a business. Technology risk refers to the potential for disruptions or failures in technology systems. Environmental risk refers to the potential impact of environmental factors, such as natural disasters or climate change, on a business.

Explanation

Functional risk is not a source of risk because it refers to the potential for errors or failures within an organization's internal processes, systems, or procedures. It is related to the efficiency and effectiveness of the organization's operations. On the other hand, political risk refers to the potential impact of political factors, such as changes in government policies or regulations, on a business. Technology risk refers to the potential for disruptions or failures in technology systems. Environmental risk refers to the potential impact of environmental factors, such as natural disasters or climate change, on a business.

7. The project manager look into risks associated with __________.

On the project

In the Project

On top of the project

Beside the project

The project manager looks into risks associated with "In the Project" because it implies that the project manager is actively involved in identifying, analyzing, and managing risks within the project. By focusing on risks "in the project," the project manager can effectively mitigate potential issues and ensure the successful completion of the project.

Explanation

The project manager looks into risks associated with "In the Project" because it implies that the project manager is actively involved in identifying, analyzing, and managing risks within the project. By focusing on risks "in the project," the project manager can effectively mitigate potential issues and ensure the successful completion of the project.

8. When determining the risk of an event or activity it can be classed as major, moderate or minor – which of the following statements correctly describes the classification?

Major - cause total failure of seven or more parts of the project.

Moderate - will hold up or increase costs in one or more areas.

Minor - will cause inconvenience and completely set the project back financially or in time.

The correct answer describes the classification of moderate risk as an event or activity that will hold up or increase costs in one or more areas. This means that the risk is significant enough to impact the project financially, but it is not severe enough to cause total failure or significant inconvenience.

Explanation

The correct answer describes the classification of moderate risk as an event or activity that will hold up or increase costs in one or more areas. This means that the risk is significant enough to impact the project financially, but it is not severe enough to cause total failure or significant inconvenience.

9. Why Risk Management is Important? Pick the most appropriate answer.

Minimizes threats, maximize opportunities, and optimizes the achievement of project objectives.

Reduce the number of threats that materialize into problems and minimize the effects of those that do occur.

Failing to manage risk will result in more problems, higher benefits and a higher chance of project success.

Results in more opportunities being captured proactively and turned into positive benefits for the project.

Effective risk management in a project involves minimizing potential threats, ensuring the mitigation of adverse events, while simultaneously maximizing the recognition of opportunities that can enhance project outcomes. By optimizing the alignment of strategies with project objectives, risk management becomes a proactive approach to secure success in a dynamic and uncertain environment.

Explanation

Effective risk management in a project involves minimizing potential threats, ensuring the mitigation of adverse events, while simultaneously maximizing the recognition of opportunities that can enhance project outcomes. By optimizing the alignment of strategies with project objectives, risk management becomes a proactive approach to secure success in a dynamic and uncertain environment.

10. Which factor is not normally considered in risk control?

Cost

Quality

Effort

Quality is not normally considered in risk control because risk control focuses on identifying and managing potential risks that may impact the success of a project or activity. Factors such as cost and effort are commonly taken into account when implementing risk control measures, as they directly affect the resources and time required to mitigate risks. However, quality is typically managed separately through quality control processes, which ensure that products or services meet the required standards and specifications. While quality is important for overall project success, it is not directly related to risk control.

Explanation

Quality is not normally considered in risk control because risk control focuses on identifying and managing potential risks that may impact the success of a project or activity. Factors such as cost and effort are commonly taken into account when implementing risk control measures, as they directly affect the resources and time required to mitigate risks. However, quality is typically managed separately through quality control processes, which ensure that products or services meet the required standards and specifications. While quality is important for overall project success, it is not directly related to risk control.