Risk 3 simplelearn-exam2-ans
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The document discusses various risk management terms and concepts. It provides answers to 27 multiple choice questions related to tools and techniques used in processes like risk identification, risk analysis, risk response planning, and stakeholder management. Key terms and processes covered include the risk register, risk breakdown structure, risk assessment methods like qualitative and quantitative analysis, and stakeholder engagement techniques.
Risk 3 simplelearn-exam2-ans
- 1. 1 . Which is the tool and technique used under control risks process? Risk audits Documentation reviews Analytical techniques Data gathering and representation techniques Answer: a) Risk audit is the tool and technique which is used to control risk. 2 . The degree of uncertainty an entity is willing to take on in anticipation of a read is----- Risk tolerance Risk appetite Risk threshold Risk averse Answer: b) The degree to which one can take in anticipation of reward is appetite. 3 . Which of the following option comes under technical risk category? Quality Government Schedule Funding Answer: a) Quality comes under technical, government comes under external, schedule comes under project management and funding comes under internal
- 2. 4 . Which of the following mathematical analysis shows the risks which has the most potential impact on the project? Expected monetary value Monte Carlo simulation Utility function Sensitivity analysis Answer: d) Sensitivity analysis shows how the uncertainty as the output can be apportioned to different sources of uncertainty assist inputs. 5 . Which of the following is the input for identify stakeholder process? Project management plan Procurement documents Stakeholder management plan Communication management plan Answer: b) Procurement documents, project charter, enterprise environmental factors and organizational process assets are inputs to identify stakeholders 6 . You are in the process of numerically analyzing the effect of identified risks on overall project objectives. Which process addresses this definition? Plan risk management Perform qualitative risk analysis Perform quantitative risk analysis Control risks Answer: c) The quantitative risk analysis helps in building numerical value like cost and time impact.
- 3. 7 . The ability of an organization to invite or take the risk to make it an opportunity is called Risk seekers Utility function Risk averser Risk neutral Answer: b) The ability of an organization which invites or handles risk is called utility function. It uses the principle of utility theory 8 . As the buyer during the contract negotiation process, you are interested in a contract that would have the least amount of risk to your organization. Which of the following contracts would be preferred to meet your risk-averse needs? Firm Fixed Price Cost Plus Percentage of Cost Cost Plus Incentive Fee Cost Plus Fixed Fee Answer: a) The Firm Fixed Price or Lump Sum contract places the responsibility to deal with the risk of a cost overrun with the seller. Cost plus contracts shift the cost risks to the buyer. 9 . Risk of incorrectly deciding to reject the null hypothesis is called : Alpha risk Beta risk Secondary risk Residual risk Answer: a) Risk of incorrectly deciding to reject the null hypothesis is called alpha risk. For example: Under the probability if the confidence interval is 90%, then the alpha risk 10%.
- 4. 10 . Which of the following is an output of identify risk process? Project documents updates Risk register Work performance information Change request Answer: b) Once you identify risk, everything should be documented under risk register 11 . Which of the following is an input to estimate activity resources? Project management plan Risk register Project charter Scope baseline Answer: b) Out of the given options only risk register is the input for estimate activity resources 12 . An analysis used in the change management context where it will adapt for risk identification by identifying driving forces and restraining forces which affect project objective is called: FMEA/FMECA/Fault analysis DMAIC Force field analysis Facilitated workshop Answer: c) This sis typically used wherever there is a change coming from different direction during the project to see if any impact due to risk
- 5. 13 . You need to inform a stakeholder about a project. Under which conditions of power and interest of stakeholder you need to consider? High power, High Interest High power, Low Interest Low power, High Interest Low power, Low Interest Answer: c) Under the stakeholder analysis technique, if the stakeholder is having low power and high interest, you have to inform them about project activities. 14 . You are in the process of defining which risks may affect the project both positively and negatively and documenting their characteristics. Which process you are into? Plan risk management Identify risks Plan risk responses Control risks Answer: b) Identify risk process helps in finding the project risks and documenting them 15 . You are a project manager managing a construction project which is half-way through the execution. The project is progressing well and is on schedule when a vendor calls to inform you that there will be a one-week delay in delivery of the product. This is due to an unforeseen labor dispute at their company. Which of the documents would best capture the impact of the delay on the project schedule? Network Diagram Procurement Management Plan Work Breakdown Structure Risk Register Answer: a) A project network diagram captures the project schedule and would be the best document to reflect the impact of a delay on a vendor deliverable. The work breakdown structure shows what work is in the project, but doesn't focus on how long it should take. The risk register would show an increase in project risk, but wouldn't help to determine the impact of a delay on the project schedule.
- 6. 16 . Which of the following is an output of plan risk management process? Risk register Project documents updates Project management plan updates Risk management plan Answer: d) Risk management plan is the output. 17 . Which estimation technique uses rule of thumb? Analogous One time estimation Three point estimation Heuristic Answer: d) Heuristic approach is based on rule of thumb and uses trial and error to come out with estimation for an activity in terms of duration and cost 18 . Generally, projects are planned by developing phases that are performed sequentially. In some cases, it is necessary to accelerate the project life cycle by overlapping project phases. Which of the following best describes this technique? The technique of overlapping requires the elimination of minor project activities which results in higher quality Overlapping project phases will compress the schedule but will not generally have an effect on project risk This technique is known as fast tracking and the risk level should be acceptable before it is implemented This technique is known as crashing and can increase the cost of the project but will not affect project risk Answer: c) Overlapping is referred to as fast tracking and can introduce risk into the project. Generally, activities are not removed and the scope is not changed. Crashing involves the addition of resources or the use of overtime and will usually increase project cost. 19 . Which is the best statement for the terminology issue? A negative project risk that has occurred A project risk that has occurred A positive project risk that has occurred A negative project risk that may occur Answer: a) Negative risk which has already occurred is issue. That may happen is still a risk. Issue is always negative.
- 7. 20 . Which of the following option is not an organization process asset? Templates Change control procedure Personnel administration Financial control procedure Answer: c) Except for personnel administration rest of the options are organizational process assets 21 . Which of the following tools is used to find if there any relation between two variables when trying to find the reason for the defect? Histogram Pareto chart Check sheets Scatter diagrams Answer: d) Scatter diagram also called correlation charts used to explain a change in one variable affect or change the other variable. 22 . Which of the following are scope baseline elements? Project scope statement, WBS and WBS dictionary Activity list, WBS and WBS dictionary Activity list, activity attributes and WBS Activity list, activity attributes and WBS dictionary Answer: a) Scope baseline consists of project scope statement, WBS and WBS dictionary 23 . A project manager would like to inform everyone in a distributed team to update their time cards for every week by Monday evening. What is the best way to communicate this expectation? Formal written Informal written Formal verbal Informal verbal Answer: b) Informal written - most likely the project manager will send an email reminder to everybody, which represents informal written communication.
- 8. 24 . Which of the following tool referred to as process map which display the sequence of steps and branching possibilities for a process that transform one or more inputs into one or more outputs? Pareto chart Network diagram Flow chart Control chart Answer: c) Flow chart technique helps in defining the process sequence which results in output by considering different inputs. 25 . You are managing a project and have a major decision to make about a change in the plan. You decide to contact several subject matter experts to obtain their opinions before making a decision. Each expert is unaware of the participation by any of the other experts you have contacted. The process being used is: Nominal group technique Delphi technique Brainstorming SWOT analysis Answer: b) The Delphi technique utilizes input from subject matter experts who remain anonymous to other experts involved in specific research or problem resolution 26 . Which is the tool and technique used under plan risk management process? Risk reassessment SWOT analysis Expert judgment Reserve analysis Answer: c) Expert judgment is the tool and technique used for this process. Rest are used in other processes
- 9. 27 . Which of the following is the tool and technique for plan stakeholder management? Stakeholder analysis Analytical techniques Communication methods Information management system Answer: b) Expert judgment, meetings and analytical techniques are tools and techniques for plan stakeholder management process 28 . There are different stakeholder levels which can influence the success or failures of the project. The project manager needs to identify these levels in order to eliminate or reduce negative risk so that the stakeholders can be in the desired engagement. Which are those different levels? Unaware, resistant, neutral, supportive and leading Unaware, resistant, neutral, supportive and forcing Unaware, resistant, neutral, supportive and dictating Unaware, resistant, neutral, delegating and leading Answer: a) Stakeholders can be under unawareness situation about project, resistant to change, neutral behavior, supportive to changes and above all on top of project which is leading. The project manager need to identify the current engagement and bring them to the desired engagement 29 . A project manager working on a construction project identifies a risk of a heavy storm in the coming months which might affect the construction activity. However, he doesn't have any reliable information on the weather forecast or the severity of the storm. In this case, what is the best project manager can do? Capture the Risk in the Risk Register Ignore the Risk as nothing can be done to avoid it Actively accept the risk and allocate time and cost reserve in contingency fund Proceed with Risk Response Strategy to counter the Risk Answer: c) In this situation the project manager has no information on the timing, anticipated frequency, or impact of the expected rough weather. Option (d) will not give any valuable information. The best option is (c) to accept the risk, but plan a contingency reserve in terms of cost and time in case the risk occurs. Option (a) and (b) are passive approach and are not recommended for a good project manager who should be always proactive in his approach towards risk management.
- 10. 30 . Which of the following is a special form of bar chart and are used to describe the central tendency, dispersion and shape of statistical distribution? Histogram Fishbone diagram Flow chart Control chart Answer: a) Bar chart is a plot with vertical bars for different reasons of occurrence of measurement. It is also called as Histogram 31 . Which diagramming technique shows causal influences, time ordering of events and an expectation of outcomes considering a set of variables? Scatter diagram Flow chart Ishikawa diagram Influence diagram Answer: d) Influence diagram represents a mathematical decision situation 32 . A project manager is managing a short duration pilot project and has started the risk management planning process. He has identified new risks and prioritized them based on probability and the impact matrix. The project manager now proceeds to plan responses for the risks without analyzing the risks numerically . According to you, this decision of project manager is----------- Incorrect , It is important to numerically analyze each risk so that they can be responded properly Correct, Quantitative Risk Analysis is waste of time and not required if risks are already assessed qualitatively Incorrect, Quantitative risk analysis is important. We need to calculate EMV for each risk and that later move to risk response planning Correct, This is a short duration project and Project Manager might skip Quantitative Risk analysis if he feels it is not assisting in the Risk Management process Answer: d) For short term projects, quantitative risk analysis is not mandate because it takes huge effect to collect the data and assessment from the numerical perspective.
- 11. 33 . Which of the following is an input to plan risk management process? Project charter Risk management plan Scope baseline Work performance data Answer: a) Project Charter provides information of risk, project description and requirements at a very high level 34 . Which of the following is an input to determine budget? Project management plan Risk register Project charter Schedule baseline Answer: b) Out of the given options only risk register is the input for determine budget 35 . Which of the following contract types does not encourage the seller to control costs and, as a result, places the greatest risk on the buyer? Cost exclusive Cost Plus Fixed Fee Cost Plus Incentive Fee Cost Plus Percentage of Cost Answer: d) The cost-plus-percentage-of-cost or CPPC contract transfers all cost to the buyer and any increase in costs will result in an increase in the fee to the seller. It also incentivizes the seller to be inefficient. This places significant risk with the buyer and requires close cost management.
- 12. 36 . A project manager is making a transition of the manufacturing plant like heavy equipment which are of high price from one city to another city. The road condition is very bad and there is a risk of damaging the equipment while transiting. The project manager go for insurance of the equipment. What is this risk response called? Accept Mitigate Avoid Transfer Answer: d) Insurance is a good example of transfer risk response. 37 . Your project's earned value (EV) = 350, its actual cost (AC) = 400 and its planned value (PV) = 325. What is the cost variance (CV), Schedule variance, cost performance index and schedule performance index? (-50, 25, 0.87, 1.07) (25, -50, 0.87, 1.07) (-50, 25, 1.07, 0.87) (0.87, 25, -50, 1.07) Answer: a) CV= EV-AC, SV= EV-PV, CPI=EV/AC and SPI=EV/PV 38 . What is the meaning of continuous process improvement in Japanese? Kanban Kaizen Ouchi Poker Answer: b) Kaizen means continuous process improvement or change for better
- 13. 39 . A project life cycle where the project scope is generally determined early in the project life cycle, but time and cost estimates are routinely modified as the project team understanding of the product increases. What is this life cycle called? Sequential Overlapping Iterative Multi phase Answer: c) Iterative means plan in detail for the near term activities and at a higher level for the later activities. As the things are getting clearer, plan in incremental method 40 . From the given table, what is the duration of the project? 12 13 14 15 Answer: d) The minimum duration required to complete the project is 15 days which itself is the critical path duration 41 . Which risk response deals with allocating some or all of the ownership of the opportunity to third party who is able to deliver the best results to the project? Share Mitigate Avoid Exploit Answer: a) Sharing actions include risk sharing partnerships, join ventures which results in opportunity so that all parties gain from the action
- 14. 42 . The degree, amount or volume of risk that an organization or individual will withstand is Risk tolerance Risk appetite Risk threshold Risk averse Answer: a) The degree to which one can withstand risk is tolerance. 43 . Prompt list is a set of risk categories which can help in identifying risk. As per prompt list, PESTLE means Political, Economical, Social, Technological, Legal and Environmental Political, Economical, Social, Technological, Legal and Ecological Political, Economical, Survival, Technological, Legal and Environmental Procedure, Economical, Social, Technological, Legal and Environmental Answer: a) PESTLE means Political, Economical, Social, Technological, Legal and Environmental 44 . Which of the following technique systematically gather the information and helps to analyze the interest of team? Sensitivity analysis Brainstorming Delphi technique Stakeholder analysis Answer: d) It's the stakeholder analysis which provides the information about team/stakeholder pulse
- 15. 45 . Which of the following option is true regarding McGregor theory? Theory X, Esteem Theory Y, Esteem Theory X, Theory Y Theory Y, Social Answer: c) McGregor says the members in the team belong to theory x and theory Y. Theory X means people should be watched every minute. Theory Y means people willing to work without supervision 46 . Which is the tool and technique used under perform qualitative risk analysis process? Risk data quality assessments Data gathering and representation techniques Variance and trend analysis Technical performance measurements Answer: a) options B is used under quantitative risk analysis and C & D are under control risk process 47 . Which of the following option is not an enterprise environmental factor? Organizational culture Government or industry standard Infrastructure Processes and procedures of the organization Answer: d) Except for organization process and procedures rest of the options are enterprise environmental factors.
- 16. 48 . Which of the following is an output of perform quantitative risk analysis process Risk register Project documents updates Work performance information Change request Answer: b) Project documents updates is the output 49 . A plan developed in anticipation of the occurrence of a risk to be executed only if specific predetermined trigger conditions arise is called: Contingency reserve Contingency plan Risk management plan Mitigation plan Answer: b) Contingency plan is developed and used when the risk occurs or during the active acceptance of the risk 50 . The amount of time that a schedule activity can be delayed without delaying the early start of immediate successor activity is called------- Free float Total float Independent float Project float Answer: a) Total float is the amount of time that a schedule activity can be delayed from early start date without delaying the project finish date. Free float is the amount of time that a schedule activity can be delayed without delaying the early start of immediate successor activity. Independent float is the amount of time an activity can be delayed if all the immediate predecessors finish at their latest finish dates and we want to start all immediate successors on the earliest start dates. Project float is an activity in the project can be delayed without affecting the customer committed date. This is like project buffer added on top of internal committed date.
- 17. 51 . The measure along the level of uncertainty or the level of impact at which a stakeholder may have a specific interest is--------- Risk tolerance Risk appetite Risk threshold Risk averse Answer: c) The level of impact at which a stakeholder may have a specific interest is threshold. Below this threshold, the organization accept the risk, above this organization will not tolerate 52 . The amount of time an activity can be delayed if all the immediate predecessors finish at their latest finish dates and we want to start all immediate successors on the earliest start dates is called-------- Free float Total float Independent float Project float Answer: c) Total float is the amount of time that a schedule activity can be delayed from early start date without delaying the project finish date. Free float is the amount of time that a schedule activity can be delayed without delaying the early start of immediate successor activity. Independent float is the amount of time an activity can be delayed if all the immediate predecessors finish at their latest finish dates and we want to start all immediate successors on the earliest start dates. Project float is an activity in the project can be delayed without affecting the customer committed date. This is like project buffer added on top of internal committed date. 53 . Which of the following is an input to identify risk process? Activity cost estimate Risk register Work performance data Scope management plan Answer: a) Activity cost estimate is required as this may provide the cost required at activity levels and if any deviation from anticipated leads to identify risk
- 18. 54 . Known risks that cannot be managed proactively should be assigned a--------- Management reserve Contingency reserve General reserve Project reserve Answer: b) Known risk should be assigned to contingency reserve and unknown risk should be assigned to management reserve 55 . A category of risk where the negative or the loss is the only outcome is called: Business risk Residual risk Pure risk Secondary risk Answer: c) Pure risk is the risk which always results in the negative impact. Example can be fire, theft, flood etc. 56 . Which of the following is not a risk category? External Technical Accept Project management Answer: c) Accept is a risk response and rest are risk categories
- 19. 57 . A measure of how likely an individual risk is to occur is called: Probability Impact Effect Trigger Answer: a) Probability is a measure of how likely an individual risk is to occur. It is also called as likelihood 58 . Which option is true regarding sigma values? 1 sigma is 68.2%, 2 sigma is 95.4%, 3 sigma is 99.7% and 6 sigma is 99.99% 2 sigma is 68.2%, 2 sigma is 90.4%, 3 sigma is 99.7% and 6 sigma is 99.99% 3 sigma is 68.2%, 2 sigma is 95.4%, 3 sigma is 97.7% and 6 sigma is 99.99% 4 sigma is 60.2%, 2 sigma is 95.4%, 3 sigma is 99.7% and 6 sigma is 99.99% Answer: a) 1 sigma is 68.2%, 2sigma is 95.4%, 3sigma is 99.7% and 6sigma is 99.99% are the different sigma values 59 . Which tool is also known as tally sheet, which is used to verify the effective collection of data? Histogram Pareto chart Check sheets Control chart Answer: c) Check sheet is also known as tally sheet and may be used as a checklist when gathering data.
- 20. 60 . Unknown risks that cannot be managed proactively should be assigned a---------- Management reserve Contingency reserve General reserve Project reserve Answer: a) Known risk should be assigned to contingency reserve and unknown risk should be assigned to management reserve 61 . A project manager assumes if a person is good or bad in some area, he/she is good or bad in other areas also. What is this called? Assumption Halo effect Structured Organized Answer: b) Halo effect. This happens usually in the organization when it comes to appraisals 62 . You are working on a project and suddenly the customer demands early release of the project deliverable ahead of the schedule. Now this may be a risk for the project. To meet this demand you start using the most talented resources from the organization. Which risk response you are dealing with? Accept Mitigate Avoid Exploit Answer: d) Exploit is positive risk strategy where the organization wishes to ensure the opportunity is realized. Here in the example, if you meet customer demand, the chances of get more business is higher.
- 21. 63 . On which themes are the Risk attitudes of both organization and stakeholders based ? Choose the correct answer. Risk owner, risk tolerance, risk threshold Risk owner, risk actionee, risk threshold Risk actionee, risk tolerance, risk threshold Risk appetite, risk tolerance, risk threshold Answer: d) Risk attitudes of both organization and stakeholders may be influenced by a number of factors and based on appetite, threshold and tolerance 64 . You are managing an information technology project. A technical specialist on your team, after having an informal meeting with a low ranking customer representative working on the project, determines that a simple alteration would be a great addition to the project. You and the project sponsor have already signed off on the scope and a change control process is in place. The technical specialist installs the change with no negative effect to the project schedule and at no additional cost. What management action should be taken? The technical specialist should be recognized for exceeding customer expectations without affecting project cost or schedule The project manager should add a task to the project plan with no additional scheduled time and note that there was no increased budget The technical specialist should be informed their actions were not authorized and was inconsistent with the change management plan The project manager should create a change control form, and have the customer sign-off, since the change has already been made Answer: c) The change control process should be followed by everyone on the project team. Failure to manage change effectively can result in significant scope creep and could result in serious implications and additional risk and liability.
- 22. 65 . Which of the following is an input to perform qualitative risk analysis process? Scope baseline Cost management plan Schedule management plan Quality management plan Answer: a) Options, B and C are inputs in quantitative risk analysis and option D is input to identify risk 66 . Which of the following statement is true? Risk and stakeholder influence are high during the initiating Risk is low and stakeholder influence is high during the initiating Risk is high and stakeholder influence is low during the initiating Risk and stakeholder influence are low during the initiating Answer: a) Risk and stakeholder influence are high during the initiating and comes down as the time progresses 67 . What is the float for the activity C from the given table? 1 2 3 5 Answer: b) The float for activity C is 2. Early start is 2, early finish is 3, late start is 4 and late finish is 5. Float formula is LS-ES or LF-EF which is 4-2 or 5-3. So the float is 2
- 23. 68 . What is the output of manage stakeholder engagement? Stakeholder register Stakeholder management plan Issue log Work performance information Answer: c) Issue log, change requests, project management plan updates, project documents updates and organizational process assets updates are the outputs of manage stakeholder engagement process 69 . Which of the following estimation technique is the most accurate where we can say risk is less? Analogous Bottom up estimating Expert judgment Reserve analysis Answer: b) Bottom up estimation is the most accurate estimation compared to the other. 70 . Prompt list is a set of risk categories which can help in identifying risk. As per prompt list, SPECTRUM means Socio-cultural, Political, Economical, Competitive, Technology, Regulatory, Uncertainty, Market Socio-cultural, Political, Economical, Commercial, Technology, Regulatory, Uncertainty, Market Socio-cultural, Political, Economical, Competitive, Technology, Regional, Uncertainty, Market Survival, Political, Economical, Competitive, Technology, Regulatory, Uncertainty, Market Answer: a) SPECTRUM means Socio-cultural, Political, Economical, Competitive, Technology, Regulatory, Uncertainty, Market
- 24. 71 . The project manager is trying to find the trend of the risks which are being identified in the project. Which of the following tool will help in analyzing the trend? Histogram Run chart Flow chart Control chart Answer: b) Run chart is used to identify and display trends in data over time. 72 . In which of the following process groups the high level risk is identified? Initiating Planning Executing Closing Answer: a) High level risk can be identified during the initiating and detailed during planning process group 73 . A response to a threat that has occurred for which a prior response had not been planned or was not effective is called: Trigger Workaround Fix Impact Answer: b) Workaround is a response to a threat that has occurred for which a prior response had not been planned or was not effective.
- 25. 74 . Which of the following is an input to estimate activity durations? Project management plan Risk register Project charter Scope baseline Answer: b) Out of the given options only risk register is the input for estimate activity durations 75 . Circumstance under which a risk strategy or risk action will be invoked is called: Probability Impact Effect Trigger condition Answer: d) Trigger condition is a circumstance under which a risk strategy or risk action will be invoked 76 . Which is the tool and technique used under perform quantitative risk analysis process? Risk data quality assessments Data gathering and representation techniques Variance and trend analysis Technical performance measurements Answer: b) options A is used under qualitative risk analysis and C & D are under control risk process
- 26. 77 . Risk plans, quality plans, and change control plans are all--------to the project plan Constraints Appendixes Additions Subsidiaries Answer: d) Subsidiary plans are the outputs of some of the other planning processes associated with Scope, Time, Cost, Quality, Human Resources, Communications, Risk, and Procurement management. Additional plans that can be added to the project management plan include Change Management, Process Improvement, Requirements Management and Configuration Management plans. 78 . Which of the following is an input to plan procurement management? Cost management plan Risk register Project charter Schedule baseline Answer: b) Out of the given options only risk register is the input for plan procurement management
- 27. 79 . There is a situation that as a project manager you need to determine the expected value of the decision to build a new plant. The cost to build the plant is $120 million. There are two probable outcomes. A 60% chance of a strong market which will result in a $200 million reward and a 40% chance that there will be a weak demand resulting in a $90 million reward. What is the expected monetary value for this decision? $36 $48 $12 $60 Answer: a) The decision to build a new plant would cost $120 million. There are two possible outcomes associated. There is a 60 % chance that there will be a strong demand for your product which will result in a $200 million dollar reward or payout. The net path value for that scenario is $200 - $120million or $80 million. There is a 60% probability that the strong demand will occur. 60% * 80 million = expected value of $48 million. There is a 40 % chance that there will be a weak demand for your product which would result in a $90 million reward or payout. $90million - $120,000 = $-30 million. The net path value is -$30,000. 40% * 30 million = -$12 million. The expected value of this decision is -12 million. Adding the 48 million and the -12 million will result in an expected monetary value of the decision of $36 million. 80 . A project manager is using an S-Curve to reflect the various expenditures of resources over the projected time of the project. This S-Curve indicates that: The bulk of the project cost is spent during execution The project follows linear expenditure over all the phases The project resource cost would be directly proportional to the size of the project The project has high risk of attrition during execution Answer: a) The S-Curve is used in project management as a means of representing the various expenditures of resources over the projected time of the project or as a means of charting the real- time expenditure of resources. This is important to project management in that it can be used to monitor the project as it progresses and compare it to the projected S-Curve to determine whether the project is being completed within the time and budget limitations. The shape of the curve indicates the maximum cost and staffing levels are during the execution of the project.
- 28. 81 . Which of the following is not a project risk management domain? Risk strategy and planning Stakeholder engagement Risk communication Perform specialized risk activities Answer: c) The five domains are risk strategy and planning, stakeholder engagement, risk process facilitation, risk monitoring and reporting and perform specialized risk activities. 82 . Which of the following is an input to plan risk responses process? Human resource management plan Communication management plan Quality management plan Risk register Answer: d) Risk register is the input 83 . Which organization is having the combination of projectized and functional organizations structure? Functional Projectized Matrix Tight Matrix Answer: c) This is a characteristic of a matrix organization. Matrix is combination of projectized and functional organization. In the matrix structure, the personnel and other resources that a project manager requires are not permanently assigned to the project, but are obtained from a pool, controlled and monitored by a functional manager. Personnel required to perform specific functions in a particular project are detailed for the period necessary, and are then returned to the control of the functional manager for reassignment.
- 29. 84 . A cost reimbursable contract introduces greater risk to the: Buyer Seller Project team Functional managers Answer: a) In a cost reimbursable contract the buyer generally does not have finalized requirements. The buyer has higher cost risk, since the seller has their costs covered. 85 . Which of the following is an input to develop schedule? Project management plan Risk register Project charter Scope baseline Answer: b) Out of the given options only risk register is the input for develop schedule 86 . You need to manage a stakeholder very closely. Under which conditions of power and interest of stakeholder you need to consider? High power, High Interest High power, Low Interest Low power, High Interest Low power, Low Interest Answer: a) Under the stakeholder analysis technique, if the stakeholder is having high power and high interest, you have to manage them closely
- 30. 87 . A measure of the effect of a risk on one or more objectives if it occurs is called: Probability Impact Effect Trigger Answer: b) A measure of the effect of a risk on one or more objectives if it occurs is called impact. It is also called as consequence 88 . Under which type of contract does the seller accept all liability for poor workmanship, engineering errors and consequential damages? Incentive fee Fixed price Cost plus Cost plus fixed fee Answer: b) Fixed price. The Fixed price or lump-sum contract places the risk on the seller. The seller will generally include a contingency in the contract to assist in minimizing the risk of reduced profits. 89 . What is the order of team development as per Tuckman ladder? Forming, Norming, Storming, Performing and Adjourning Forming, Storming, Norming, Performing and Adjourning Forming, Performing, Norming, Storming and Adjourning Forming, Storming, Performing, Norming and Adjourning Answer: b) Forming, Storming, Norming, Performing and Adjourning is the correct order as per Tuckman ladder
- 31. 90 . A group creativity technique that allows large numbers of ideas to be classified into groups for review and analysis is called : Alternative analysis Mind mapping Affinity diagram Cause and effect diagram Answer: c) Explanation Affinity diagram is a bottom up approach where ideas are collected and grouped under bucket for further review 91 . The project team is finding the causes by looking at the problem statement and asking "why" until the actionable root causes have been identified. Which of the following tool helps in determining the causes? Pareto chart Fishbone diagram Histogram Control chart Answer: b) Fishbone diagram also called as cause and effect diagram is used to find the causes of the problem statement. 92 . As a project manager, you know that organizational process asset is one of the key inputs for many processes which we come across during project management. In risk management there is a process called quantitative risk analysis which helps in numerically assigning the values for the risk. Now to carry out this process, organizational process assets play an important role. Among the option given, which one is not fit statement about organizational process asset? You will use organizational process assets for risk databases that may be available from industry sources. You will use organizational process assets for studies of similar projects by risk specialists. You will use organizational process assets to determine costs of all risks events within the current project. You will use organizational process assets for information from prior similar projects. Answer: c) Determine cost is an estimation and not an OPA
- 32. 93 . Which of the following option suits for the definition process of defining how to conduct risk management activities for a project? Plan risk management Risk communication Risk analysis Risk identification Answer: a) Plan risk management process helps to understand how to identify risks, how to carry out analysis, distinguishing between opportunity and threat and controlling the risk 94 . Point where budget is compared to earned value for performance measurement is called: Control account Relative account Fixed account Control point Answer: a) Control account is a point where scope, budget, actual cost and schedule are integrated and compared to earned value for performance measurement 95 . A CEO from the Paris office wants to communicate project information to the technical officer in China. The correct procedure would be? CEO will encode the message in French; the technical staff will decode the message in Chinese CEO will decode the message in French; the technical staff will encode the message in Chinese CEO will encode the message in Chinese; the technical staff will decode the message in French CEO will decode the message in Chinese; the technical staff will encode the message in French Answer: a) Remember, each message is encoded by the sender and decoded by the receiver based on the receiver's education, language, experience, and culture.
- 33. 96 . Diagram that describes a decision under consideration and the implications of choosing one or another of the available alternatives is called: Decision tree analysis Cause and effect diagram Fish bone diagram Affinity diagram Answer: a) The decision tree is a diagram that describes a decision under consideration and the implications of choosing one or another of the available alternatives. 97 . You need to monitor a stakeholder. Under which conditions of power and interest of stakeholder you need to consider? High power, High Interest High power, Low Interest Low power, High Interest Low power, Low Interest Answer: d) Under the stakeholder analysis technique, if the stakeholder is having low power and low interest, you have to monitor them 98 . Which of the following statement is correct with respect to input, tats and output for control stakeholder process? Project charter, stakeholder analysis and stakeholder register Project management plan, expert judgment and stakeholder management plan Stakeholder management plan, communication methods and issue log Issue log, Information management systems and work performance information Answer: d) Issue log is the input, Information management systems is the tool and work performance information is the output
- 34. 99 . Project manager and the team are estimating the duration for an activity. They are using 3 point estimation technique. The duration with worst value is 10 days, the best value is 4 days and the most likely value is 7 days. What is the estimated duration and variance for this activity? 10+/-4 days 7+/-1 day 6+/-1day 21+/-7 days Answer: c) The formula for 3 point estimation is (P+4M+O)/6 and variance is (P-O)/6 100 . A key responsibility of the project manager is to ensure the proper adaptation of the project management processes and coordinate the process phases through the project life cycle. This involves balancing the basic aspects of scope, cost, and schedule in addition to managing quality, communication, customer satisfaction, etc. In a single word, how can the roles of the project manager is best described? Integrator Leader Communicator Differentiator Answer: a) The role of a project manager is the combination of all the above options, but the one that is most critical to the project's success is that of an Integrator. As described in the question, a project manager is expected to integrate the project management processes and coordinate the process phases throughout the project management life cycle to ensure all areas of the project come together to successfully deliver the project.
- 35. 101 . Which of the following statement is correct from the definition of project, program and portfolio? Project is temporary & unique. Program is group of related projects, Portfolio is group of projects and programs Project is temporary & unique. Program is group of projects, Portfolio is group of projects and programs Project is temporary & unique. Portfolio is group of related projects, Program is group of projects Program is temporary & unique. Project is group of related projects, Portfolio is group of projects and programs Answer: a) Project is temporary & unique. Program is group of related projects, Portfolio is group of projects and programs 102 . An analysis of a model structured to identify the various elements that can cause system failure by themselves or in combination with others based on the logic of the system is: FMEA/FMECA/Fault analysis DMAIC Facilitated workshop Brainstorming Answer: a) It is a structured approach and is called failure mode and effect analysis 103 . The risks that arise as a direct result of implementing a risk response is called: Primary risk Secondary risk Pure risk Risk Answer: b) The risks that arise as a direct result of implementing a risk response is called secondary risk
- 36. 104 . Prompt list is a set of risk categories which can help in identifying risk. As per prompt list, TECOP is Technical, Environmental, Commercial, Operational and Political Technical, Economical, Commercial, Operational and Political Technical, Environmental, Communication, Operational and Political Technical, Environmental, Commercial, Operational and Procedural Answer: a) TECOP means Technical, Environmental, Commercial, Operational and Political 105 . Project risk is typically characterized by which three elements: Severity of impact, duration of impact and cost of impact Identification, type of risk category and probability of impact Risk, probability, and impact Occurrence, frequency and cost Answer: c) A risk event is the actual occurrence of the risk. Example - equipment failure. Risk probability is the likelihood that a risk event may occur. Impact refers to the consequence of the occurrence of the risk event in terms of cost, time, scope, etc. 106 . The project manager and the team are adopting a risk response strategy whereby they try to reduce the probability of occurrence or impact of risk. What is this risk response called? Accept Mitigate Avoid Transfer Answer: b) Mitigation is reducing the impact towards the project objectives
- 37. 107 . Which of the following option comes under project management risk category? Regulatory Funding Requirements Estimating Answer: d) Estimating comes under project management, Regulatory comes under external, funding comes under internal and requirements comes under technical 108 . Which of the following statement is correct with respect to relationship between product life cycle and project life cycle? Project lifecycle and product life cycle are same Product life cycle is initiating, planning, executing, monitoring and control and closing Product life cycle consists of multiple project life cycle Project life cycle consists of multiple product life cycle Answer: c) Product life cycle consists of multiple project life cycle is the correct option 109 . An estimation technique used based on historical data from a similar project is known as: Parametric estimation Heuristic estimation Analogous estimation Benchmarking Answer: c) Analogous is based on the previous history of similar projects
- 38. 110 . Process of reviewing all change requests, approving changes and managing changes to deliverables, organizational process assets, project documents and project management plan and communicating their disposition is called: Change control system Perform integrated change control Work authorization system Risk management Answer: b) Integrated change control through CCB takes care of all these activities 111 . The process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact is----------- Plan risk management Perform qualitative risk analysis Perform quantitative risk analysis Control risks Answer: b) Based on probability and impact, the qualitative risk analysis helps in building ranking of risks 112 . Which model is used to analyze stakeholder power, urgency and legitimacy? Power/interest grid Power/influence grid Influence/impact grid Salience model Answer: d) Salience model describes classes of stakeholders based on their power, urgency and legitimacy.
- 39. 113 . You are in the process of project selection from different countries. One of the projects which is proposed by a country is not doing good in terms of economical front. So if you select this particular project there, it can be risky for the organization. You will play safe and not consider for further project selection process. Which risk response you adopted? Accept Mitigate Avoid Exploit Answer: c) You are not honoring that project and avoiding for further evaluation 114 . From the figure shown, what is the duration of project? 41 42 37 36 Answer: c) Activity A and B together it takes 30. C will be finished by 28. D start from 31 and finishes on 37
- 40. 115 . Which of the following is an input to perform quantitative risk analysis process? Risk management plan Human resource management plan Communication management plan Quality management plan Answer: a) Risk management plan is the input for quantitative risk analysis process from the given option 116 . The project team decides to acknowledge the risk and not take any action unless the risk occurs. Which risk response they are dealing with? Accept Mitigate Avoid Transfer Answer: a) Risk acceptance is nothing but not taking any action and accepting the situation. If risk occurs contingency reserve will be established. 117 . Technique used to consolidate ideas created through individual brainstorming into a single map to reflect commonality and differences in understanding and to generate mew ideas is called: Alternative analysis Mind mapping Affinity diagram Cause and effect diagram Answer: b) It is a top down approach where the from the objective the ideas are branched out with groups
- 41. 118 . The risk response strategy to increase the probability and impact of positive impact of an opportunity is called--------- Share Mitigate Enhance Exploit Answer: c) Enhance strategy is used to increase the probability and impact of positive impact of an opportunity. Adding more resources to an activity to finish early can be an example 119 . Which of the following order is correct as per the Edward Deming cycle? Plan, Do, Check and Act Plan, Act, Do and Act Plan, Act, Check and Do Act, Check, Do, Plan Answer: a) Deming explained about small process improvement by using the model PDCA or plan, do, check and act 120 . You need to satisfy a stakeholder. Under which conditions of power and interest of stakeholder you need to consider? High power, High Interest High power, Low Interest Low power, High Interest Low power, Low Interest Answer: b) Under the stakeholder analysis technique, if the stakeholder is having high power and low interest, you have to satisfy them
- 42. 121 . You are a project manager in a financial firm with multinational dealings. You feel the financial meltdown in one of the client's countries could affect your project adversely and you want to hedge your risks. Although the probability of occurrence of the event is low, you are advised to play it safe. In terms of risk attitude, your organization could best be described as? Risk Seeker Risk Averse Risk Neutral Risk Mitigator Answer: b) Someone who doesn't want to take risks is called risk averse and the project manager seems to be part of such an organization. Option (c) risk neutral describes a person/or an organization which is indifferent to the risk and option (a) risk seeker suggests an aptitude to take risks with an opportunity for higher returns. Option (d) risk mitigation is a risk response strategy and is an invalid choice. 122 . As a project manager, you have been asked by the customer to give an overview of the project status using milestone charts. Which of the following statement is incorrect about milestone charts? Milestones usually have zero duration Milestone charts are similar to bar charts but only show major points or events Milestone charts can be used to capture the status of project schedule Milestones are used to define phases of a project Answer: d) Milestone charts capture the major milestones in the project which represents the beginning or completion of a deliverable, work package, phase, or project. A milestone is a zero duration activity and these charts are commonly used to present project status to senior management or a customer. Milestones do not define the phases of a project - this is defined by the project lifecycle
- 43. 123 . Which of the following term is used when we are dealing with risk due to force of nature while drafting the contract document? Pivity Force Majeure Utility function Lassez-faire Answer: b) Pivity is based on the mutual or trust basis, utility function is about risk taking ability of organization, lasses faire is the one of the leadership style by leaving the team members alone. Force majeure is used under contract to define the terms if anything happens due to natural disasters 124 . Which is the tool and technique used under identify risk process? Analytical techniques Meetings Checklist analysis Risk categorization Answer: c) options A and B are tools and techniques for plan risk management process and risk categorization is under perform qualitative risk analysis process. 125 . You are a project manager working on a compliance project in a banking firm. The project is scheduled to complete six weeks from now. Your sponsor tells you that if the project is finished sooner, the company can get some monetary incentives offered by the government. You decide to fast track the project, which would have what effect: Increase risk in the project Not affect the project risk Decrease risk in the project Cannot be determined Answer: a) Fast-tracking is the process of rescheduling tasks to be performed in parallel that were originally planned in series. Remember, fast-tracking always involves risk that could lead to increased cost and rework later.
- 44. 126 . During which part of the planning process group the detailed risk can be identified? Plan human resource management Plan communication management Activity cost estimate Create work breakdown structure Answer: d) While decomposing the scope of work into work breakdown structure, we can identify the detailed or comprehensive risks 127 . A project team with a CPI of 0.78 is looking for options to reduce cost. Choose the best option from the following. Reduce a test cycle, in the System Testing phase Reduce scope by cutting down non- essential features Add more resources to expedite the schedule Revisit estimates and eliminate risks; re- estimate Answer: d) Option (c) wouldn't reduce cost. Option (a) and (b) would always have a negative effect as they compromise on quality or scope. Of all the available option's (d) is the one with the minimum negative effect.
- 45. 128 . A project manager working on a construction project identifies a risk of a heavy storm in the coming months which might affect the construction activity. However, he doesn't have any reliable information on the weather forecast or the severity of the storm. In this case, what is the best project manager can do? Capture the Risk in the Risk Register Ignore the Risk as nothing can be done to avoid it Actively accept the risk and allocate time and cost reserve in contingency fund Proceed with Risk Response Strategy to counter the Risk Answer: c) In this situation the project manager has no information on the timing, anticipated frequency, or impact of the expected rough weather. Option (d) will not give any valuable information. The best option is (c) to accept the risk, but plan a contingency reserve in terms of cost and time in case the risk occurs. Option (a) and (b) are passive approach and are not recommended for a good project manager who should be always proactive in his approach towards risk management. 129 . Techniques used to assess multiple alternatives that will be used to generate, classify and prioritize product requirements is called------ Group decision making techniques Group creativity technique Meetings Expert judgment Answer: a) Group decision making techniques used to assess multiple alternatives that will be used to generate, classify and prioritize product requirements 130 . A risk which arises later in a project and could have been identified earlier on is called: Primary risk Secondary risk Residual risk Emergent risk Answer: d) An emergent risk is a risk which arises later in a project and which could have been identified earlier on
- 46. 131 . Which of the following is an input to plan quality management? Cost management plan Risk register Project charter Schedule baseline Answer: b) Out of the given options only risk register is the input for plan quality management 132 . As a project manager you decide to create an issue log which captures issue description, owner, and the target date for issue closure. All of the following are common examples of issues in the project except: Differences in Opinion Probable delay in the next delivery Pending root cause analysis Delay in receiving feedback from the customer Answer b) Probable delay in the next delivery represents a project risk and is not an issue as the event is uncertain. This may or may not happen in future. 133 . Which of the following statement is true regarding the role of risk owner and risk action owner? Both are same The person responsible for ensuring that an appropriate response is selected and implemented is risk owner where as risk action owner is responsible for carrying out approved risk actions The person responsible for ensuring that an appropriate response is selected and implemented is risk action owner where as risk owner is responsible for carrying out approved risk actions Risk owner is called risk actionee Answer: b) Risk owner ensures the risk is implemented. Risk action owner executes or implements the decided action. Risk action owner is called risk actionee
- 47. 134 . Techniques that are used to generate ideas within a group of stakeholders is called: Group decision making taking Group creativity technique Meetings Expert judgment Answer: b) Group creativity Techniques used to generate ideas within a group of stakeholders like brainstorming, NGT, mind mapping 135 . From the table shown, will you buy a new car or an old car? And how much is the new car expenditure and old car expenditure considering the maintenance? New car as the total investment and maintenance is $21,500 Old car as the total investment is $22,000 New car as the total investment and maintenance is $35,000 Old car as the total investment is $25,000 Answer: a) New car is $20000+($15000*10%)+(0*90%)=$21,500 and Old car is $15,000+($10,000*70%)+(0*30%)=$22,000. New car is cheaper
- 48. 136 . Here NPV is Net Present Value. As a project manager, if you had to choose amongst projects A, B, C, and D which one would be the best option? Project A: NPV $ 50,000 to be completed in 3 years Project B: NPV $ 40,000 to be completed in 2 years Project C: NPV $ 70,000 to be completed in 9 years Project A: NPV $ 60,000 to be completed in 1 years Answer: c) The project with highest value of NPV should be selected. The information on number of years to complete the project is irrelevant as it is already considered while calculating the value of NPV. NPV is defined as: The difference between the present value of cash inflows and the present value of cash outflows. Remember, NPV is used in capital budgeting to analyze the profitability of an investment or project. 137 . There are 15 people in a team, an addition of one person was made. How many communication channels are present in the team now? 16 105 120 56 Answer: c) Use the formula n(n-1)/2. n is the number of people. 16 * 15/2 138 . Data driven improvement cycle used for improving, optimizing and stabilizing business process and designs is called: FMEA/FMECA/Fault analysis DMAIC Facilitated workshop Brainstorming Answer: b) DMAIC is the tool used mostly to drive six sigma and other improvements. It is Define, Measure, Analyze, Improve and Control
- 49. 139 . From the given table, what are the critical path activities? ABCDEH ACDEGH ABDEGH ABDEFH Answer: c) Activities A, B, D, E, G and H are the activities coming under critical path. These activities are having zero float. 140 . Which are the two components of Herzberg theory? Hygiene factor and Physiological Hygiene factor and motivational factor Motivational factor and Physiological Esteem and social Answer: b) Hygiene factor and motivational factor are the two factors of Herzberg theory.
- 50. 141 . You are the project manager assigned to a critical project, which requires that you handle project risk intentionally and methodically, so you have assembled only the project team. They have identified 32 potential project risks, determined what would trigger the risks, rated and ranked each risk using a risk rating matrix. You have also reviewed and verified all documented assumptions from the project team and verified the sources of data used in the process of identifying and rating the risks. You are continuing to move through the risk management process. What have you forgotten to do? Conduct a Monte Carlo simulation Determine which risks are transferable Determine the overall riskiness of the project Involve other stakeholders Answer: d) The risk management process requires input from all key stakeholders including the project team. Use of a stakeholder register assists in the proper identification of stakeholders and in obtaining their input. 142 . An estimation technique used based an algorithm, historical data and project parameters and other variables like per unit bases is known as: Parametric estimation Heuristic estimation Analogous estimation Benchmarking Answer: a) Parametric estimating uses algorithm, historical data, project parameters like unit, cost, duration.
- 51. 143 . The process of implementing risk response plans, tracking identified risks, monitoring residual risks, identifying new risks and evaluating risk process effectiveness throughout the project is called: Plan risk management Perform qualitative risk analysis Perform quantitative risk analysis Control risks Answer: d) Control risk is monitoring and controlling overall risk 144 . Which of the following is an input to control risks process? Scope baseline Schedule baseline Cost baseline Work performance report Answer: d) Work performance report is used to find if any other risks and also to control the same 145 . Which of the following relationship is mostly used while constructing network diagram? Finish to Start Start to Start Start to Finish Finish to Finish Answer: a) FS relationship is most widely used which is nothing but start of an activity depends on finish of previous activity
- 52. 146 . Which of the following statement is true? The objective of project risk management is to increase the likelihood and impact of positive events and decrease the likelihood and impact of negative events in the project The objective of project risk management is to decrease the likelihood and impact of positive events and increase the likelihood and impact of negative events in the project The objective of project risk management is to increase the likelihood and impact of positive events and increase the likelihood and impact of negative events in the project The objective of project risk management is to decrease the likelihood and impact of positive events and decrease the likelihood and impact of negative events in the project Answer: a) To increase the opportunity and decrease the threat. Refer to PMBOK 147 . Which of the following is an output of control risks process Work performance data Work performance report Work performance information Risk register Answer: c) Work performance information is the output of control risk process 148 . Defining--------------will provide a structure for systematically identifying risks to a consistent level of detail during the project planning process. The areas defined in this process should reflect common sources of risk for the industry or application area. Assumptions Constraints The product description Risk categories Answer: d) Assumptions are information items that should be verified. They are not generally considered to be based on factual data. Constraints are limitations that should be considered when developing project plans. The product description provides details about the complexity of the product to be delivered. Risk categories assist is detailed risk identification and may be utilized with a Risk Breakdown Structure (RBS).
- 53. 149 . Which of the following statement is true regarding lead and lag? Lead is advancing an activity and lag is delaying an activity Lead is delaying an activity and lag is advancing an activity Lead is can be planned and lag can't be planned Both lead and lag are same Answer: a) Lead is advancing an activity to avoid any risk and lag is used to leverage best output from the situation 150 . Your project has the following information based on earned value analysis, its Earned Value (EV) is $1000, Actual Cost (AC) is $ 850 and Planned Value (PV) is $1050. Which of the following is true about your project? Your project is over budget and behind schedule Your project is under budget and behind schedule Your project is over budget and ahead of schedule Your project is under budget and ahead of schedule Answer: b) Cost Variance = EV-AC = $1000-$850 =$150 is positive (under budget) and SV = EV - PV =1000-1050 = -50 is negative (behind schedule). 151 . Which formula is used for Triangular distribution? (p+4m+o)/6 (p+m+o)/6 (p+m+o)/3 (p+4m+o)/3 Answer: c) Triangular distribution is average of pessimistic, most likely and pessimistic. Beta distribution is weighted average which is (p+4m+o)/6.
- 54. 152 . Which of the following tools is used to identify or distinguish a few vital sources that are responsible for causing most of a problem's effects? Histogram Pareto chart Flow chart Control chart Answer: b) Pareto chart also known as 80/20 rule helps in identifying a few critical vs. critical reasons for the issues. Also used to prioritize the defects from the given samples 153 . The amount of time that a schedule activity can be delayed from early start date without delaying the project finish date is called : Free float Total float Independent float Project float Answer: b) Total float is the amount of time that a schedule activity can be delayed from early start date without delaying the project finish date. Free float is the amount of time that a schedule activity can be delayed without delaying the early start of immediate successor activity. Independent float is the amount of time an activity can be delayed if all the immediate predecessors finish at their latest finish dates and we want to start all immediate successors on the earliest start dates. Project float is an activity in the project can be delayed without affecting the customer committed date. This is like project buffer added on top of internal committed date.
- 55. 154 . Two months into a design project, the customer requested a modification to the product specifications. The change was immediately implemented by the project team without notifying the project manager. During the final testing phase, results were different than what was planned. This scenario is an example of which of the following : Poor adherence to the change control process Poor adherence to the communication plan Poor development of the quality management plan Poor definition of the test plan Answer: a) The change control process was not followed. Failure to follow the agreed upon change control processes may create serious risk situations and jeopardize the entire project. 155 . Using the following information, determine the total price to be paid by the customer. This is a Cost Plus Incentive Fee Contract. The sharing ratio is 80/20. The target cost is 150,000. The price ceiling is 180,000. The target profit is 10,000. The actual cost of the project was 140,000. 140000 150000 180000 152000 Answer: d) Target Cost = 150,000, Target Profit = 10,000, Actual cost = 140,000, Savings = 10,000 Contractor share of the savings = 20% x 10,000 or 2000 Total Profit = target profit plus incentive = 10,000 + 2000 = 12,000 Total price paid = 12,000 + 140,000 = 152,000 156 . Which of the following is an output of perform qualitative risk analysis process Risk register Project documents updates Work performance information Change request Answer: b) Project documents updates in the output
- 56. 157 . During the planning process, the project manager should be aware that assumptions generally involve: A degree of risk Direction from the Sponsor Financial controls Detailed, factual information Answer: a) Assumptions are not based on factual information and failure to validate may result is significant risk events. 158 . Which of the following is an input to estimate costs? Project management plan Risk register Project charter Schedule baseline Answer: b) Out of the given options only risk register is the input for estimate costs 159 . Which of the following is an output of plan risk responses process Risk register Project management plan updates Work performance information Change request Answer: b) Project management plan updates is the output
- 57. 160 . Technique that computes the project cost or schedule many times using input values, selected at random from probability distributions of possible costs or duration to calculate a distribution of possible project cost or completion date of project is called: Quantitative risk analysis Qualitative risk analysis Monte Carlo analysis Group decision making analysis Answer: c) Explanation Monte Carlo analysis is a simulation tool that predicts the possible project cost and completion date based on different input values along with the overall impact from the risk perspective 161 . For your project you are working on procurement related area to outsource some work packages. While doing so you decide to go for fixed price contract. What is the disadvantage in the case of fixed price contract ? Less work for buyer to manage Seller has a strong incentive to control costs Buyer knows the total price at project starts Final cost may be more than a cost reimbursable contract because contractors have to inflate the price to cover their risk Answer: d) All options are advantages of a fixed price contract except D.
- 58. 162 . You are a project manager evaluating a decision to buy a licensed software tool. This tool has a 50% chance of being successfully implemented in your company and would cost $50,000. However there is a 40% chance that your company would be able to save $150,000 due to improved productivity. What is the expected monetary value for this decision? 35000 - $35, 000 $21,000 - $21, 000 Answer: a) Expected monetary value for a project is calculated by subtracting expenses from savings. In this case Savings = 0.4 * $150,000 = $60,000 and Expenses = 0.5* $50,000 = $25,000.So EMV = $60,000- $25,000 = + $35,000. 163 . What is the term used for reserves that are maintained for unknown unknowns? Contingency reserves Management reserves Project reserves Product reserves Answer: b) Management reserves are kept aside for covering unknown unknowns, i.e. risks that are not identified in advance 164 . A group of related activities aggregated and displayed as a single activity is called: Networked activities Coupled activities Hammock activity Hanging activities Answer: c) A group of activities which are related to each other is called hammock activity also called as summary activity
- 59. 165 . Which of the following option is in the correct order from lowest to highest point as per Maslow hierarchy of needs? Physiological, safety, Social, esteem, Self-actualization Self-actualization, esteem, social, safety, Physiological Physiological, safety, esteem, Social, Self-actualization Physiological, Social, esteem, safety, Self-actualization Answer: a) Physiological, safety, Social, esteem, Self-actualization is the correct order 166 . Which is the tool and technique used under plan risk responses process? Risk data quality assessments Data gathering and representation techniques Expert judgment Technical performance measurements Answer: c) Expert judgment is the tools and technique used for plan risk responses process under the given options 167 . What is early start, late start, early finish and late finish for activity F? 10, 11, 12, 13 2, 4, 3, 5 10. 11, 12, 13 13, 12, 11, 10 Answer: a) For activity F, early start is 10, late start is 11, early finish is 12 and late finish is 13.
- 60. 168 . Which statement is true regarding RACI model? We can have multiple accountable people for a single activity We can have only one accountable people for a single activity We can have only one responsible people for a single activity We can have multiple responsible, multiple accountable, multiple consultants and multiple people who will be informed Answer: b) In RACI model we can have only one accountable who will take the ownership for the activity 169 . The project manager in a project is finding the measurements of certain metrics stable or not by looking in a diagram which represents measurements within the limits and out of the limit. Which of the following tool helps in deterring the measurements are within the required limits are not? Histogram Fishbone diagram Flow chart Control chart Answer: d) Control chart defines the mean and the tolerance by specifying upper control and lower control limits. If the measurements are coming with these limits, then it is ok. If the measurements are crossing the limits, then it calls for corrective actions.
- 61. 170 . Your team is using a model that translates the uncertainties specified at a detailed level into their potential impact on project objectives at the level of the whole project. The technique being used is: Modeling and Simulation Data precision analysis Decision tree analysis Quantitative trends Answer: a) The use of modeling and simulations such as a Monte Carlo simulation generate information through iterations. Project information at the activity level is chosen at random during the process and produces data that illustrates the likelihood of achieving specific cost or schedule targets.