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2025 PMP Exam Chapter 11: Comprehensive Guide to Project Risk Management – Key Processes, Exams of Project Management

Emory UniversityProject Management

2025 PMP Exam Chapter 11: Comprehensive Guide to Project Risk Management – Key Processes, Strategies, and Practice Questions for PMP Certification Success

Typology: Exams

2024/2025

Available from 07/05/2025

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2025 PMP Exam Chapter 11: Comprehensive
Guide to Project Risk Management – Key
Processes, Strategies, and Practice Questions for
PMP Certification Success
1. You have been asked to establish an estimated project cost using Expected Monetary
Value (EMV). If the project has a best case estimate of $10,000 with a probability of
20%, a most likely case estimate of $12,000 with a probability of 50%, and a worst case
estimate of $14,400 with a probability of 30% what is the EMV for the project?
A. $12,320
B. $12,400
C. $13,010
D. $13,260 - - correct ans- -A. $12,320
Expected Monetary Value
The formula to get the correct answer is:
($10,000 * 20%) + ($12,000 * 50%) + ($14,400 * 30%) = $12,320
1. You are asked to choose between two projects, A or B, based on the highest gain (or
the lowest loss). Project A will cost $650,000 and B will cost $467,000. There is a 56%
chance that project A will be successful, which will result in a gain of $1,800,000. If
project A fails there will be a loss of $900,000. There is a 67% chance project B will be
successful, and that will result in a $950,000 gain. If Project B fails there will be a loss of
$670,000. Based on this information, what is the value of the best alternative?
A. $-38,000
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Download 2025 PMP Exam Chapter 11: Comprehensive Guide to Project Risk Management – Key Processes and more Exams Project Management in PDF only on Docsity!

2025 PMP Exam Chapter 11: Comprehensive

Guide to Project Risk Management – Key

Processes, Strategies, and Practice Questions for

PMP Certification Success

  1. You have been asked to establish an estimated project cost using Expected Monetary Value (EMV). If the project has a best case estimate of $10,000 with a probability of 20%, a most likely case estimate of $12,000 with a probability of 50%, and a worst case estimate of $14,400 with a probability of 30% what is the EMV for the project? A. $12, B. $12, C. $13, D. $13,260 - - correct ans- - A. $12, Expected Monetary Value The formula to get the correct answer is: ($10,000 * 20%) + ($12,000 * 50%) + ($14,400 * 30%) = $12,
  2. You are asked to choose between two projects, A or B, based on the highest gain (or the lowest loss). Project A will cost $650,000 and B will cost $467,000. There is a 56% chance that project A will be successful, which will result in a gain of $1,800,000. If project A fails there will be a loss of $900,000. There is a 67% chance project B will be successful, and that will result in a $950,000 gain. If Project B fails there will be a loss of $670,000. Based on this information, what is the value of the best alternative? A. $-38,

B. $38,

C. $-51,

D. $51,600 - - correct ans- - A. $-38, To answer this question you must calculate the expected monetary value of each choice using the decision tree model found in your LGd training guide and then compare the options. Whichever option has the greatest value is the one you should choose. Decision Trees Prob P/L Net Out Total 56% 1,800K 1,150K 644K (650K) (38K) 44% (900K) (1,550K) (682K) 67% 950K 483K 323K (467K) (51K) 33% (670K) (1,137K) 375K 1 Which of the following is an input to the identify risks process? A. Project management plan B. SWOT analysis C. Risk related contracts D. Technical performance measurements - - correct ans- - A. Project management plan p. 396 - The inputs to the identify risks process includes: Project management plan Project documents Agreements Procurement documentation Enterprise environmental factors Organizational process assets

Meetings

  1. Which of the following is NOT an input to the perform quantitative risk analysis process? A. Organizational process assets B. Agreements C. Project management plan D. Project documents - - correct ans- - B. Agreements p. 396 - The inputs to the perform quantitative risk analysis process include: Risk management plan Cost management plan Schedule Management Plan Risk register Enterprise environmental factors Organizational process assets
  2. Which of the following is NOT a tool or technique used in the perform quantitative risk analysis process? A. Prompt lists B. Representations of uncertainty C. Interpersonal and team skills D. Expert judgment - - correct ans- - A. Prompt lists p. 396 - The tools and techniques used in the perform quantitative risk analysis process include: Expert judgment Data gathering Interpersonal and team skills

Representations of uncertainty Data analysis

  1. Which of the following is a tool or technique used in the perform quantitative risk analysis process? A. Representations of uncertainty B. Risk categorization C. Meetings D. Project management information system - - correct ans- - A. Representations of uncertainty p. 396 - The tools and techniques used in the perform quantitative risk analysis process include: Expert judgment Data gathering Interpersonal and team skills Representations of uncertainty Data analysis
  2. Which of the following is a tool or technique used in the plan risk responses process? A. Risk response analysis B. Risk response planning C. Contingent response strategies D. Strategic risk response planning - - correct ans- - C. Contingent response strategies p. 396 - The tools and techniques used in the plan risk responses process include: Expert judgment Data gathering Interpersonal and team skills

C. Status meetings D. Technical performance measurement - - correct ans- - A. Risk urgency assessment p. 396 - The tools and techniques used in the monitor risks process include:

  1. Which of the following is a tool or technique used in the monitor risks process? A. audits B. Interpersonal and team skills C. Expert judgment D. Decision making - - correct ans- - A. audits p. 396 - The tools and techniques used in the monitor risks process include: Data analysis Audits Meetings
  2. Which of the following is NOT a tool or technique used in the implement risk responses process? A. Expert judgment B. Interpersonal and team skills C. Technical performance measurements D. Project management information system - - correct ans- - C. Technical performance measurements p. 396 - The tools and techniques used in the implement risk responses process include: Expert judgment Interpersonal and team skills

Project management information system

  1. Which of the following is a tool or technique used in the implement risk responses process? A. Data gathering and representation techniques B. Project management information systems C. Risk data quality assessment D. Planning meetings and analysis - - correct ans- - B. Project management information systems PMBOK® Guide - The tools and techniques used in the implement risk responses process include: Expert judgment Interpersonal and team skills Project management information system
  2. You are acting as the portfolio manager and must select a project to execute from a pool of three choices. Each of the choices has an expected payout of $20,000 and an equal 75% chance of succeeding. In this situation what does $15,000 represent? A. Net present value B. Risk value C. Expected monetary value D. Simple interest - - correct ans- - C. Expected monetary value The expected monetary value is calculated by multiplying the probability times the impact of any event.
  3. You are leading a large complex project within your organization that is forecast to continue for ten more months. The project has an 18% chance of being impacted in a given month by a particular risk. What is the probability that the project will be impacted by the risk in the 3rd month?

This question is actually much easier than it first appears. Because we are assuming a range of estimates that is +/- 3 sigma, meaning it is a normal distribution, all you have to do is determine which range estimate has the smallest difference or variance. The 3 point estimate has a range of 13, the 33-46 days is a range of 13, and 40 +/- 8 days is 16.

  1. You have been asked to select one of four projects for your organization to execute. The organization is very risk adverse. If you assume the ends of a range of estimates are +/- 3 sigma from the mean, which of the following range estimates involves the least risk? A. Optimistic = 21 days, most likely 27 days, pessimistic = 32 days. B. 26 days plus or minus 5 days. C. 20 - 33 days. D. Mean of 26 days. - - correct ans- - B. 26 days plus or minus 5 days This question is actually much easier than it first appears. Because we are assuming a range of estimates that is +/- 3 sigma, meaning it is a normal distribution, all you have to do is determine which range estimate has the smallest difference or variance. The 3 point estimate has a range of 11 days. The plus or minus 5 days is a range of 10 and 20- 33 days is 13.
  2. Which of the following is not a factor in the assessment of project risk? A. Transference costs B. Risk probability C. Value at stake D. Risk event - - correct ans- - A. Transference costs "Transference costs" is a fancy way of saying insurance premiums. These do not come into play until you are evaluating the risk responses.
  3. You take over a project from a previous project manager. As part of the turn over process they hand you a risk watch list. What should be done with the risks on the watch list? A. Add the information to your takeover report.

B. Add them to the lessons learned for future projects. C. Read over the watch list as they are already covered in the properly completed contingency plans. D. Read over the watch list then revisit during monitoring and controlling. - - correct ans-

  • B. Add them to the lessons learned for future projects A good project manager is constantly monitoring the identified risks on a project. In this question you do not know where the watch list came from.
  1. Which of the following is not always an input to the risk management process? A. Work breakdown structure B. Lessons learned C. Project status reports D. Historical information - - correct ans- - C. Project status reports Although project status reports can be a vital input to the risk management process, they are usually not available during the risk planning process and are therefore not always an input to the risk management process.
  2. It is very important that the project manager determine risk tolerances in order to help: A. The sponsor understand how the resource managers will act. B. Schedule the project. C. Rank the project risks. D. Estimate the project duration. - - correct ans- - C. Rank the project risks Risk tolerances, or how much risk various stakeholders are willing to accept. This is a critical piece of information used to rank the project risks.
  3. Which of the following is not a common result of risk management?
  1. In which of the following risk management processes are you most likely to be required to find workarounds? A. Monitor risks B. Plan risk responses C. Identify risks D. Quantitative risk analysis - - correct ans- - A. Monitor risks Workarounds—by definition—are responses created for risks not included in the risk register.
  2. You have just determined that you need to transfer a risk. In which of the following risk management processes are you? A. Identify risks B. Plan risk responses C. Monitor and control risks D. Perform quantitative risk analysis - - correct ans- - B. Plan risk responses Be careful here. The question states you have just determined that you NEED to transfer a risk. This is done in the plan risk response process.
  3. You are acting as the project manager for a large project $1,500,000 within your organization. You have just finished the risk response plan for your project. Which of the following should you probably do next? A. Begin a project risk reassessment. B. Begin to analyze the risks that appear in major project documents. C. Complete the work breakdown structure. D. Determine the overall risk rating for the project. - - correct ans- - C. Complete the work breakdown structure.

Finishing the risk response plan is done in the planning process group. The only of the options that is also in the planning process group is the completion of the work breakdown structure.

  1. You are in the process of quantifying risks on a project you are leading. Several of your key resources are non-collocated and have needed input. How can this be done? A. Make use of the Delphi technique. B. Make use of Monte Carlo analysis. C. Make use collaboration software. D. Apply critical chain modeling. - - correct ans- - A. Make use of the Delphi technique. The Delphi Technique is specifically designed to survey your experts, aggregate their responses and then feed the aggregated result back to them for confirmation. This is the best option in a situation where the resources are not all together.
  2. During the plan risk management process the project team you are leading discovers 387 risks and 32 major causes of those risks. The project is part of a major program within the organization and must be completed. Your team is very experienced and has worked together for several years. You have also worked with the sponsor for several years as well, and they are very supportive of your efforts. Significant time has been spent to ensure the project scope and WBS is complete and it has been signed off by all the key stakeholders. Unfortunately, your team has not been able to determine an effective way to mitigate or insure against the one of those major risks. It is something that must be done by the internal team and cannot be outsourced. It also cannot be deleted from the project. What would be the best solution? A. Determine a way to transfer the risk B. Determine a way to avoid the risk C. Continue to inves - - correct ans- - D. Accept the risk There are two important aspects to this question. Firstly, did you notice that everything but the last four sentences is unnecessary? Secondly, this question really reflects the real world. The question excludes everything but acceptance. Sometimes in the real world all you can do is accept a risk.

C. The scope statement from the project planning process. D. The resource plan from the project planning process. - - correct ans- - B. A discussion with several team members within the organization from a similar project that failed in the past. This question centers on imagining where you are in the project. The question gives you a charter and nothing else. Therefore, you must assume you are in the initiating process. Two of the other choices say they are from the planning process and therefore not available. The PMBOK® Guide is a nice framework, bur remember PMI® suggests the situation is critical.

  1. You are working as a project manager on a large new product development project. While preparing your risk responses your team identifies additional risks. What should you do? A. Get management to allocate another 5% to the project budget to cover the risks. B. Determine the risk events and the associated cost, then add the cost to the project budget as a reserve. C. Document the risks, and calculate the expected monetary value based on the PI score that result from the risk occurrence. D. Add reserves to the project to accommodate the new risks and notify management. -
  • correct ans- - C. Document the risks, and calculate the expected monetary value based on the PI score that result from the risk occurrence. Before you can determine the appropriate response you have to determine the value or cost of the risk as well as the impacts. Only then can you determine if you or management needs to add reserves or another response is needed.
  1. You are leading a project that has an SPI of 0.69 and a CPI of .71. The project has more than 1,000 work packages, and it is being completed over three years. The team has not worked together before, and the project has not been well supported. Which of the following is the best thing to do? A. Update the risk register with any new risks and analysis. B. Examine the WBS for unnecessary work packages.

C. Examine the RAM for necessary changes. D. Examine the budget for necessary changes. - - correct ans- - A. Update the risk register with any new risks and analysis. To answer this question correctly you had to notice the project is already significantly over budget and behind schedule. Changing the WBS, RAM, or budget should only happen in response to risks that occur. So you should start there.

  1. Your project is very close to completion when an unidentified risk occurs. This risk could affect the project's overall ability to deliver. What should you do first? A. Develop a risk response plan. B. Develop a workaround. C. Alert the project sponsor to the potential impacts to the schedule, costs, and scope of the project. D. Qualify the risk. - - correct ans- - D. Qualify the risk. The first thing you always do is analyze the situation and develop alternatives. Only then do you proceed.
  2. You are the project manager on a multi-year facilities development project. Significant spring rains caused major flooding that caused power outages and the loss of all project records not stored on your laptop. What should have been done to prevent this problem? A. Approve a larger contingency reserve. B. Plan for a larger management reserve. C. Maintain the records outside a flood plain. D. Monitor the weather and have a contingency plan. - - correct ans- - D. Monitor the weather and have a contingency plan. With the information provided you do not know what the best solution would have been. The only thing you can say for sure is that you should have had a contingency plan—oh, and watching the weather probably wasn't a bad idea either...
  1. Which of the following is a primary characteristic of the Delphi Technique? A. Expert opinion. B. Simulation modeling in a hierarchical process. C. Use of heuristic analysis. D. Extrapolation from historical documents. - - correct ans- - A. Expert opinion. The Delphi Technique is a process where you survey your subject matter expert, aggregate their responses, and then feed back the aggregation for confirmation.
  2. You are leading a large IT project that is nearing completion. Your sponsor requests a change to the project that would increase the project risk. What should you do first? A. Update the risk register. B. Gain an understanding of why the sponsor wants the change. C. Analyze the impacts of making the change with the project team. D. Calculated the EMV of the risk and create a new cost estimate. - - correct ans- - C. Analyze the impacts of making the change with the project team. According to PMI®, the first thing you must do in any situation is understand the impacts. Only then can you devise the correct response.
  3. You are leading a major construction project. During project execution a major problem occurs that does not appear in the risk register. What should you do first? A. Inform the project stakeholders. B. Look for secondary risks. C. Exam the identify risks process for flaws. D. Create a workaround. - - correct ans- - D. Create a workaround. This is a risk that has already happened. The first thing you need to do is deal with the problem and then take the workaround to the sponsor and key stakeholders.
  1. You are leading a research and development project. You are in the executing process group when one of your senior resources identifies a risk that is not listed in the risk register. What should you do? A. Determine how the team member identified the risk. B. Analyze the risk. C. Inform the sponsor and key stakeholders of the risk. D. Place the risk in the risk register. - - correct ans- - B. Analyze the risk. The first thing you always do is analyze the risk. Only then can you determine what should be done next.
  2. You are taking over a $50,000 IT project for your organization. The project is entering its third phase. Although there appear to be many risks on the project, no one has evaluated them to assess the range of possible impacts. What needs to be done? A. Perform qualitative risk analysis B. Plan risk management C. Plan risk responses D. Monitor risks - - correct ans- - B. Plan risk management The project has started, and it should complete the risk management process. That process begins by planning risk management. Since that step has not already occurred it needs to be completed first.
  3. Which of the following best describes a heuristic? A. An advanced statistical calculation used to model risks. B. A simulation used to model risks. C. A rule of thumb. D. A calculation used to produce a weighted measure of risk. - - correct ans- - C. A rule of thumb.