Questions on Project Risk Management

Questions

1. Andrew has joined as the Project Manager of a project. One of the project documents
available to Andrew lists down all the risks in a hierarchical fashion. What is this
document called?
a. Risk Management Plan.
b. List of risks.
c. Monte Carlo diagram.
d. Risk Breakdown Structure.

CORRECT: d. Hierarchical description of risks is called Risk Breakdown structure.

2. Which of the following statements is true about risks?

a. When evaluating risks their impact should be considered, however
probability of occurrence is not important.
b. Risks if they happen always have negative impact and not positive.
c. Risk register documents all the risks in detail.
d. Risk response plan is another name for Risk Management Plan.

CORRECT: c. Risk register documents the risks in detail.

3. Beta is the Project Manager of a Road construction project. During a project review,
Beta realizes that one particular risk has occured. To take appropriate action against
risk that has happened, Beta needs to refer to which document?
a. Risk response plan
b. Risk management plan
c. Risk breakdown structure
d. Risk register

: a. Beta needs to refer to the Risk response plan that documents responses to
identified risks.

4. During which stage of Risk planning are risks prioritized based on probability and
impact?
a. Identify Risks
b. Plan Risk responses
c. Perform Qualitative risk analysis
d. Perform Quantitative risk analysis
 CORRECT: c. Risk probability and impact are defined during Qualitative risk
analysis.

5. During which stage of Risk planning are modeling techniques used to determine
overall effects of risks on project objectives for high probability, high impact risks?
a. Identify Risks
b. Plan Risk responses
c. Perform Qualitative risk analysis
d. Perform Quantitative risk analysis

CORRECT: d.

6. Andrew is a Project Manager for Green Valley project. A risk management plan has
been prepared for the project. Which of the following should Andrew do next?
a. Perform Qualitative risk analysis
b. Perform Quantitative risk analysis
c. Identify Risks
d. Plan Risk responses

CORRECT: c. Risk identification is performed after performing the risk management

plan.

7. Which of the following processes has risk register as the primary output?
a. Plan Risk Management
b. Identify Risks
c. Monitoring and Control Risks
d. Perform Qualitative Risk Analysis

CORRECT: b. Process of Identify Risks has Risk register as the major output.

8. Five of the processes in Project Risk Management are from which process group?
a. Initiating
b. Planning
c. Executing
d. Monitoring and Control

CORRECT: b. Five of the six processes in Project Risk Management are part of the
Planning process group.

9. John Strauss is a Project Manager for a reforestation project. To identify the risks
involved, John sends a questionnaire to gather inputs from experts. Which technique
is John using?
 a. Delphi technique
b. Interviews
c. Brain storming
d. Documentation review

CORRECT: a. John is using the Delphi technique to identify risks.

10. Mathew is a Project Manager for software migration at a bank. A major risk that has
been identified is attrition of resources. As a strategy to respond to this risk, Mathew,
with support from Senior Management, provides good increments to his team
members. What type of risk response is Mathew following?
a. Accept
b. Avoid
c. Transfer
d. Mitigate

CORRECT: d. Mathew is mitigating the risk by reducing the probability of risk

happening

11. Which of these is a valid response to positive risks?

a. Exploit
b. Mitigate
c. Enhance
d. Share

CORRECT: Risk mitigation is a response to negative risks and not positive risks.
Positive risks may be responded by - "Exploit", "Enhance", "Share", "Accept".

1. Which of these is not an example of a project?

a. Mission to send a parrot to the moon.
b. Cleaning the city center every day before office hours begin.
c. Evacuation of city before a major storm expected this weekend.
d. Building a stadium in the city of Rio De Janeiro.

INCORRECT: b. Cleaning the city centre is done every day. It is an operation and not
a project. A project must be unique and time-limited.

2. Claire is a Project Manager for building a new apartment complex. The planning of
the project is complete and an Exit Gate meeting is scheduled. What is likely to
happen in this meeting?
 a. Project's learning will be doucumented and the project will be closed.
b. Claires performance will be critically analyzed by the management.
c. The performance of the project team members will be reviewed by Claire.
d. Projects deliverables will be reviewed and a decision will be made on
projects continuation.

CORRECT: d. During exit gate or kill point, projects deliverables are evaluated. A
decision is made whether the project should be continued.

3. Alice is joining a new project. Her manager informs Alice that requirements of the
project will be defined using progressive elloboration. Which of the following option
best describes progressive eloboration?
a. The requirements of the project will be defined over a period of time
in iterative fashion based upon feedback received.
b. Requirements are unknown at this time and will be defined later.
c. Requirements will be defined based upon discussions with the customer.
d. Requirements will be defined based upon discussions with the subject
matter expert.

CORRECT: a.

4. In which type of organization does the Project Manager has maximum authority?
a. Balanced matrix.
b. Strong Matrix.
c. Functional.
d. Projectized.

CORRECT: d. In Projectized oganization a Project Manager has maximum authority.

5. Chris has joined ABC organization as a Project Manager. The project team members
do not report to Chris. They report to Engineering and Accounting departments.
Which type of organization structure best represents ABC style of functioning?
a. Balanced matrix.
b. Strong Matrix.
c. Functional.
d. Projectized.

CORRECT: c. In functional organization, project team members report to their

respective departments.

6. In which type of Matrix organization, does the PM have very little authority.
a. Weak Matrix.
 b. Strong Matrix.
c. Balanced Matrix.
d. Functional Matrix.

CORRECT: a. In weak matrix organizations, Project Manager carries less authority.

7. During which stage of a project, the stakeholders influence is maximum?

a. Early phases.
b. During the middle of the project.
c. Late stages.
d. Stakeholders influence is same across all phases.

INCORRECT: a. During early phases of the project, stakeholders influence is

maximum.

8. Which of these is not a valid knowledge area as per PMI?

a. Requirements Management.
b. Integration Management.
c. Risk Management.
d. Procurement Management

CORRECT: a. Requirements Management is not a valid Knowledge Area.

9. Which of these is not a valid process group as per PMI?

a. Initializing.
b. Visualizing.
c. Planning.
d. Closing.

CORRECT: b. Visualizing is not a valid process group as per PMI.

10. The process of Identify Stakeholder is part of which process group?

a. Stakeholder Management.
b. Communication Management.
c. Initiating.
d. Planning.

CORRECT: c. Identify Stakeholders is part of Initiating process group.

11. Which process group has processes from all the ten knowledge areas?
 a. Initiating.
b. Planning.
c. Executing.
d. Monitoring and Control.

CORRECT: b. Planning process group has processes from all nine knowledge areas.

12. Which of the following is not a process in Project Integration Management?

a. Monitor and Control Schedule.
b. Report Performance.
c. Perform Integrated Change Control.
d. Develop Project Charter.

CORRECT: b. Report Performance is not a part of Project Integration Management

13. Tom is a Project Manager helping his company on selection of a new project. Tom is
using Payback period project selection method. Which one of the four projects should
his company select?
a. Project A requires an investment of one million dollars. After six months
of investment, project will generate profits of $50K per month.
b. Project B requires an investment of $100K dollars. It will yield returns of
$5K per year.
c. Project C requires an investment of one million dollars. It will yield
returns of $40K per month.
d. Project D requires an investment of $500K dollars. It will yield
returns of $50K per month.

CORRECT: d. Project D has minimum payback period of ten months.

14. Mary is a Project Manager helping her company on selection of a new project. Mary
is using Benefit Cost ratio project selection method. Which one of the four projects
should her company select?
a. Project A has a construction cost of $1 million and a projected sale price
of $1.2 million.
b. Project B has a construction cost of $2 million and a projected sale
price of $2.5 million.
c. Project C has a construction cost of $5 million and a projected sale price
of $6 million.
d. Project D has a construction cost of $10 million and a projected sale price
of $11.5 million.
 CORRECT: b. Project B has benefit cost ratio of 1.25. This is the highest among the
four projects.

15. Tim is a Project Manager helping his company on selection of a new project. Tim is
using Net Present Value project selection method. Which one of the four projects
should his company select?
a. Project A has a net present value of $300K.
b. Project B has a net present value of $400K.
c. Project C has a net present value of $500K.
d. Project D has a net present value of $600K.

CORRECT: d. A Project with the highest net present value must be selected during
project selection.

16. Chen is a Project Manager helping his company on selection of a new project. Tim is
using Opportunity Cost project selection method. Which one of the four projects
should his company select?
a. Project A has a opportunity cost of $300K.
b. Project B has a opportunity cost of $400K.
c. Project C has a opportunity cost of $500K.
d. Project D has a opportunity cost of $600K.

CORRECT: a. A project with the smallest opportunity cost should be selected.

17. Kumar is a Project Manager helping his company on selection of a new project.
Kumar is using Payback period project selection method. Which one of the four
projects should his company select?
a. Project A has a Payback period of three years.
b. Project B has a Payback period of four years.
c. Project C has a Payback period of five years.
d. Project D has a Payback period of twentyfour months.

CORRECT: d. Project d has the minimum payback period. The project manager
should select the project with the least payback period.

18. Jim is a Project Manager helping his company on selection of a new project. Jim is
using Internal rate of return project selection method. Which one of the four projects
should his company select?
a. Project A has an internal rate of return of 5%.
b. Project B has an internal rate of return of 6%.
c. Project C has an internal rate of return of 7%.
d. Project D has an internal rate of return of 8%.
 CORRECT: d. The Project Manager should choose a project with highest internal rate
of return.

19. Samantha is a Project Manager of a Software product. The project required an initial
investment of $100,000. The project generated a revenue of $20,000 in the first year.
There were operational cost of $5000 and tax liability of another $5000. What is the
return on invested capital?
a. 5%
b. 10%
c. 20%
d. 0%

CORRECT: b. After tax profits of the project are $10000. Return on invested capital
= $10000 divided by $100000.

20. Which of the following is true about the project charter?

a. The project charter is signed by the Project Manager.
b. The project charter is generated as an output of Develop Project
Management plan process.
c. The project charter includes the detailed schedule of the project.
d. Project charter includes a high level view of project requirements,
budget and milestones.

CORRECT: d. The project charter is signed by Senior Management/Project Sponsor.

Hence option a is incorrect. Project charter is the primary output of Develop Project
Charter process. Hence option b is incorrect. Project charter includes a high level
schedule,

21. Which of the following is tru about the Project Management Plan?
a. Project Management Plan identifies and authorizes the Project Manager.
b. Project Management Plan is a detailed project schedule defining tasks,
their dependencies as well as primary milestones of the project.
c. Project Management Plan is a formal document that defines how the
project is to be managed.
d. Project Management Plan is prepared as part of the Direct and Manage
Project Work process.

CORRECT: c. The project charter identifies the Project Manager. Hence a is

incorrect. PMP is prepared as part of Develop Project Management Plan process.

22. George is the Project Manager of a project responsible for manufacturing shirts for a
large order. During which process the shirts will get manufactured?
a. Develop Project Management Plan
 b. Direct and Manage Project Work
c. Monitor and Control Project Work
d. Create WBS

INCORRECT: b. During the Direct and Manage Project Work process the PMP gets
executed. The deliverables get generated during this process.

23. Perform Integrated Change Control process is part of which process group?
a. Initiating.
b. Planning.
c. Executing.
d. Monitoring and Control.

CORRECT: d. Perform Integrated Change Control is part of Monitoring and Control

process.

24. Greg is a Project Manager of a construction project. The customer has requested that
an additional room needs to be constructed at an extra cost? How should Greg
respond to this request
a. Document the request and present it to Change Control Board.
b. Refuse the request as this was not part of the original scope.
c. Accept the request as the customer is willing to pay for it.
d. Consult the project sponsor.

CORRECT: a. The Change Control Board should review and evaluate the change
request in this case.

25. Michael is the Project Manager of a software project being developed for a large
customer. A senior management executive of Michaels organization suggests Michael
that adding a new feature will be a good addition to his project. What is the best
course of action for Michael?
a. Document the request and present it to change control board.
b. Refuse the request as this was not part of the original scope.
c. Accept the request as it is being suggested by a senior member of the
organization.
d. Consult the project sponsor.

CORRECT: b. Gold plating is the process of providing functionality not in scope.

PMI does not recommend gold plating.

26. Doug is a Project Manager for a project to build a bridge. During his review of the
progress, Doug finds out that the project is likely to be completed in six months
before schedule. Which is the most suitable thing for Doug to do next?
 a. Organize a party for the project team to ensure employee motivation
remains high.
b. Raise a change request to reduce staff.
c. Doug does not need to do anything.
d. Doug needs to use the additional six months to make sure the bridge
exceeds thq quality goals.

CORRECT: b. If the project is running ahead of the schedule, Project Manager

should evaluate reducing staff for the project. This could lead to savings for
organization.

27. Which of these is not done during the Close Project process?
a. Creation of deliverables of the project.
b. The handing over of deliverables to the receiving party.
c. Documenting the project learnings.
d. Release of project resources.

CORRECT: a. Creation of deliverables is output of the Direct and Manage Project

work process.

28. Mary is taking over an ongoiung project as a Project Manager. The earlier project
manager is no more with the organization. Mary wants to understand why the project
should be executed, the high level project requirements and budget of the project.
Which document should Mary refer to?
a. Project Management Plan.
b. Project Statement of work.
c. Business case.
d. Project charter.

CORRECT: d. The project charter explains the purpose of the project, high level
requirements and high level budget.

Questions on Project Management Fundamentals

Questions

1. Which of these is not one of the constraints of a project?

a. Scope
b. Resources
 c. Team
d. Budget

CORRECT: c. Projects constraints are - Scope, Resources, Quality, Schedule, Budget

and Risk

2. Which of the following is not correct about initial phase of a project?

a. The cost associated at the beginning of the project is highest.
b. Stakeholders have maximum influence during this phase
c. The highest uncertainty is at this stage of the project.
d. All the above statements are correct.

CORRECT: a. There is minimum requirement of personnel and hence minimum cost

at the project initiation stage.

3. At which stage, does a typical project has maximum cost?

a. Initial stage
b. Middle stage
c. Final stage
d. Cost is same at all stages.

CORRECT: b. In the middle stages, the resources and cost usage is maximum.

4. At which stage, in a typical project do stakeholders have maximum influence?

a. Initial stage
b. Middle stage
c. Final stage
d. Shareholders have similar influence at all stages.

CORRECT: a. It is easy to make changes to project goals and approach at the initial
stage. Stake holders have maximum influence at this stage.

5. You are the Project Managers of XYZ consultants. The Project team members are
from Finance and HR departments. The team members report to Finance and HR
Managers respectively, and you have limited control over them. What type of
organizational hierarchy does XYZ consultants follow?
a. Matrix organization
b. Projectized organization
c. Functional organization
d. None of these.
 CORRECT: c. The team members report to Functional Managers.

6. The Project Managers have maximum authority in which type of organization?

a. Weak Matrix organization
b. Balanced Matrix organization
c. Strong Matrix
d. Project Managers have same authority in the three types of organizations.

CORRECT: c. In strong matrix organization, Project Managers have more authority.

7. Which organization is closest to Functional organization?

a. Weak Matrix organization
b. Balanced Matrix organization
c. Strong Matrix
d. Projectized organization

CORRECT: a. Weak matrix organizations have a similar characteristics to Functional

organizations.

8. Which of the following is not a project?

a. Running an election campaign for a political candidate.
b. Building a bridge over a river.
c. Pilot aircraft for a United flight.
d. Writing a book on Project Management.

CORRECT: c. Projects must be a unique endeavor. Piloting a flight is a regular day-

today operation, and not a project.

9. There are two processes in the initiating process group. These are part of which
knowledge area?
a. Project Cost Management
b. Project Scope Management
c. Project Time Management
d. Project Integration Management

CORRECT: d. The two processes Develop Project Charter, and Develop Project
Scope statement are part of project integration management knowledge area.

10. Which of the following is a project?

a. Sending a weekly status report
b. Improving the roads of Rio de Janeiro for 2016 Olympics
 c. Getting ready for office every day
d. Selling toys in a toy store

CORRECT: b. Other operations are ongoing operations and not projects.

Questions on Project Communications Management

1. The project you are managing has nine stakeholders. How many channel of
communications are there between these stakeholders?
a. 9
b. 8
c. 45
d. 36

CORRECT: d. There will be (9*8)/2 channel of communication.

2. Which of the following is not an example of formal communication?

a. Contract
b. email
c. Project status report
d. Status meeting

INCORRECT: b. Communication via email is not considered a formal

communication.

3. Which of the following process is not included in project communication knowledge

area?
a. Control Communications
b. Plan Communications Management
c. Manage Communications
d. Manage Stakeholder Expectations

CORRECT: d. Manage Stakeholder Expectations is not a process in Project

communication knowledge area.

Questions on Project Procurement Management

Questions

1. The process of Control Procurements falls under which process group

 a. Planning
b. Closing
c. Monitoring and Control
d. Executing

CORRECT: C. Control procurement is part of Monitoring and Control process group.

2. Sam Consultancy has a large internal project to be initiated. To staff this project, Sam
Consultancy is working with People Consultancy to provide three resources for six
months. The resources will be part of the team managed by Sam Consultancy for six
months. Which contract type should be used by Sam Consultancy?
a. Purchase Order
b. Cost plus Fee
c. Fixed cost
d. Time and Material

CORRECT: D. This is a case of Staff Augmentation. These projects are managed in

Time and Material.

3. Sam Consultancy is planning to buy ten desktops for $1500 each from a leading
computer store. Which type of contract will get signed in this case?
a. Purchase Order
b. Cost plus Fee
c. Fixed cost
d. Time and Material

CORRECT: A. Purchase Order is used.

4. Tree Consultancy is getting 200 computers installed from a vendor. The vendor will
be paid the cost involved and a 10% incentive. Which contract will be used in this
case?
a. CPPC
b. CPIF
c. CPFF
d. Fixed Cost

INCORRECT: A. Cost plus percentage of the cost

5. Alice is a Project Manager. She is coordinating a bidder conference to allow vendors

to get clarification on the work that needs to be performed. Which phase of Project
Management is in progress.
a. Conduct Procurements
 b. Plan Procurements
c. Control Procurements
d. Close Procurements

INCORRECT: A. During the Conduct Procurements process, bidders can clarify their
doubts using bidder conference.

Questions on Project Stakeholder Management

1. The implementation of which of the following processes decreases the risk of project
failure?
a. Manage stakeholder engagement
b. Control stakeholder engagement
c. Plan stakeholder management
d. Develop stakeholder engagement

CORRECT: A - Manage stakeholder engagement decreases risk of project failure.

2. The five levels of stakeholder engagement are...?

a. Oblivious, opposed, neutral, proactive, driving
b. Unaware, opposed, neutral, supportive, driving
c. Oblivious, resistant, neutral, supportive, leading
d. Unaware, resistant, neutral, supportive, leading

CORRECT: D - The correct selection is: Unaware, Resistant, Neutral, Supporting,

Leading.

3. Plan stakeholder management is fundamentally concerned with all the following

except...?
a. Developing strategies to effectively engage stakeholders throughout the
project
b. Development of the stakeholder register
c. Development of the stakeholder management plan
d. Identifying how the project will affect stakeholders

CORRECT: B - The stakeholder register is created in the Identify Stakeholders

process.

4. You are engaged in gathering information from stake holders regarding whose
interests should be taken into account throughout the project. This is called:
 a. Identify stakeholders
b. Stakeholder analysis
c. Expert judgment
d. Plan stakeholder management

CORRECT: B - This is called a stakeholder analysis.

5. Which of the following is not included in the Stakeholder Management Plan?

a. Project lifecycle
b. Communications requirements
c. Impact of scope changes to stakeholders
d. Stakeholder management strategy

CORRECT: A - The project lifecycle is selected and defined in the project

management plan.

6. Most projects will have a ___________ number of stakeholders.

a. Resistant
b. Supportive
c. Diverse
d. Unknown

CORRECT: C - A diverse number of stakeholders.

7. Which of the following is not an input to the Control Stakeholder Engagement

process?
a. Project management plan
b. Issue log
c. Project documents
d. Work performance information

CORRECT: D - Work performance information is an output of control stakeholder

engagement.

8. The ability of stakeholders to influence the project is typically highest at the

_________ stages.
a. Planning
b. Initial
c. Executing
d. Design
 CORRECT: B - the initial stages.

9. The three 'I's' of stakeholders are...?

a. Independence, influence and inquiry
b. Importance, inquiry and influence
c. Interest, influence and importance
d. Influence, inquiry and importance

CORRECT: C - Interest, influence and importance.

10. A stakeholder is...?

a. Anyone who is involved in the project
b. Anyone positively or negatively impacted by the project
c. Anyone who can influence the direction of the project
d. Anyone who can impact/be impacted positively or negatively by the
project

CORRECT: D - Anyone who can impact/be impacted positively or negatively by the

project.