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Questions and Answers
In project management, what is the primary difference between risk mitigation and risk acceptance?
In project management, what is the primary difference between risk mitigation and risk acceptance?
- Risk mitigation transfers the risk to a third party, while risk acceptance retains the risk within the project team.
- Risk mitigation involves taking steps to reduce the probability or impact of a risk, while risk acceptance means acknowledging the risk but taking no action. (correct)
- Risk mitigation is used for positive risks, while risk acceptance is used for negative risks.
- Risk mitigation requires immediate action, while risk acceptance is a passive approach used only when there is insufficient time for other responses.
A company is deciding between investing in two projects with different risk profiles. Project A has a high potential return but also a high probability of failure, while Project B has a lower potential return but is considered very safe. How should the company make its decision?
A company is deciding between investing in two projects with different risk profiles. Project A has a high potential return but also a high probability of failure, while Project B has a lower potential return but is considered very safe. How should the company make its decision?
- Evaluate both the potential return and the probability of success for each project, considering the company's risk tolerance. (correct)
- Always choose Project B because minimizing risk is the most important factor.
- Choose the project that aligns with the CEO's personal preference.
- Always choose Project A because high potential return is the most important factor.
Which of the following methods is LEAST effective for identifying potential project risks?
Which of the following methods is LEAST effective for identifying potential project risks?
- Consulting with subject matter experts.
- Brainstorming sessions with project stakeholders.
- Reviewing historical data from similar projects.
- Ignoring feedback from junior team members to avoid unnecessary concerns. (correct)
In the context of risk management, what does a 'risk breakdown structure' (RBS) accomplish?
In the context of risk management, what does a 'risk breakdown structure' (RBS) accomplish?
A project team has identified a risk with a high probability of occurrence but a low potential impact. What is the MOST appropriate initial course of action?
A project team has identified a risk with a high probability of occurrence but a low potential impact. What is the MOST appropriate initial course of action?
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Description
Explore risk mitigation vs acceptance in project management. Understand decision-making with varying risk profiles. Learn effective risk identification and the role of a risk breakdown structure.
