PMI Updated PMI-RMP Exam Questions and Answers by ayzal

Risk impact assessment involves calculating the impact of identified risks. Risk analysis is the process of examining, estimating, and evaluating the impact of risks, which helps in calculating the impact (Reference: PMBOK Guide, 6th Edition, p. 417)

Risk analysis is the process of assessing the likelihood and impact of the identified risks on the program objectives. It helps to calculate the impact of the risks by using qualitative or quantitative methods. Risk analysis can provide useful information for risk prioritization, risk response planning, and risk reporting. References: PMI, The Standard for Risk Management in Portfolios, Programs, and Projects, 2019, p. 67; PMI, The Standard for Program Management, Fourth Edition, 2017, p. 113.

Documenting the results of the risk monitoring and controlling process is important for creating lessons learned. This helps future projects by providing a reference for risk management practices and experiences.

The documentation of the results of monitoring and controlling risks is a valuable source of information for lessons learned. Lessons learned are the documented information that reflects both the positive and negative experiences of a project. They represent the organization’s commitment to project management excellence and the project manager’s opportunity to learn from the actual experiences of others. By documenting the results of monitoring and controlling risks, the project team can capture the effectiveness of the risk responses, the changes in the risk exposure, the root causes of the risks, the best practices and the lessons learned for future projects. This documentation can help to improve the risk management process, enhance the project performance, and increase the organizational knowledge base. References: PMI Risk Management Professional (PMI-RMP) Examination Content Outline and Specifications1, page 10; A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Sixth Edition, page 406; Lessons learned - PMI.

Adding correlation to the model accounts for the relationship between activities, which can result in increased variability in the model's outcomes. This will increase the standard deviation, which is a measure of the uncertainty in the model.

 According to the PMBOK Guide, 6th edition, Chapter 11: Project Risk Management1, an effect of adding the correlation to the Monte Carlo schedule risk analysis model is that it increases the standard deviation of the model. This is because:

Correlation is the statistical relationship between two or more variables. In a schedule risk analysis, correlation can be used to model the dependency between the durations of different activities. For example, if two activities are positively correlated, it means that if one activity takes longer than expected, the other activity is also likely to take longer than expected. Conversely, if two activities are negatively correlated, it means that if one activity takes longer than expected, the other activity is likely to take shorter than expected.

A Monte Carlo schedule risk analysis is a simulation technique that uses random values for uncertain variables, such as activity durations, to generate possible outcomes for the project schedule. The simulation is repeated many times to produce a probability distribution of the project completion date and duration. The standard deviation is a measure of the variability or dispersion of the distribution. A higher standard deviation means that the distribution is more spread out and less predictable.

Adding correlation to the Monte Carlo schedule risk analysis model increases the standard deviation of the model because it introduces more variability and uncertainty to the simulation. Correlated activities can have a cumulative effect on the project schedule, either positively or negatively, depending on the direction and strength of the correlation. This can result in more extreme outcomes for the project completion date and duration, which increase the spread of the distribution and the standard deviation.

References:

PMBOK Guide, 6th edition, Chapter 11: Project Risk Management1

Risk Management Professional (PMI-RMP)® Exam Cert Guide2

Residual risks are those that remain after implementing risk response strategies. In this scenario, the primary risk is a major power outage that could lead to the failure of the digital platform hosting the new product database. The financial institution has mitigated this risk by installing backup power generators. However, the possibility of a power outage still exists, and the effectiveness of the backup generators cannot be guaranteed with absolute certainty. Therefore, the remaining risk, despite the mitigation measures, is classified as residual risk.

PMI Risk Management Study Guide References:

The PMI-RMP Exam Content Outline defines residual risk as the risk that remains after risk responses have been implemented, highlighting the necessity of monitoring these risks throughout the project lifecycle.