4.5.4 Define Key Concepts Related to the ‘risk’ Practice PRINCE2-FOUNDATION-VERSION-7 Practice Questions (Page 2)

Questions 6–10

1. 6application · medium

   A project manager is updating the risk register. The team has confirmed that a key supplier will definitely deliver a critical component two weeks late due to a confirmed factory shutdown. The project manager records this as an issue rather than a risk. Which statement best justifies this decision?

   • AThe supplier is an external party, so the project cannot influence the outcome.
   • BThe event is a threat, and threats are always recorded as issues.
   • CThe event has already occurred, so there is no uncertainty about whether it will happen.
   • DThe impact on the project schedule is too high to be considered a risk.
   Reveal Solution Discussion Select an answer first
2. 7foundation · easy

   What is the definition of risk appetite in PRINCE2?

   • AThe specific actions taken to reduce the probability or impact of a risk
   • BThe process of identifying, assessing, and controlling risks throughout the project
   • CThe maximum amount of risk that can be accepted before the project must be stopped
   • DThe amount of risk an organization is willing to accept in pursuit of its objectives
   Reveal Solution Discussion Select an answer first
4. 8application · medium

   A company's board has stated that it is willing to accept up to a 10% cost overrun on projects to pursue aggressive market expansion. However, for a new flagship project, the project board has set a limit that the cost overrun must not exceed 5%. Which two PRINCE2 risk concepts are being applied here?

   • ARisk exposure (10%) and risk impact (5%)
   • BRisk probability (10%) and risk effect (5%)
   • CRisk tolerance (10%) and risk appetite (5%)
   • DRisk appetite (10%) and risk tolerance (5%)
   Reveal Solution Discussion Select an answer first
5. 9foundation · easy

   In PRINCE2, what is the defining characteristic of a risk?

   • AA certain event that is planned for and included in the project schedule
   • BAn uncertain event that, if it occurs, will have an effect on the project objectives
   • CA problem that must be escalated to the project board for an immediate decision
   • DAn event that has already occurred and caused a negative impact on the project
   Reveal Solution Discussion Select an answer first
6. 10expert · hard

   A project manager is reviewing the risk register and finds an entry that says 'the project will definitely be delayed by two weeks because the client has confirmed a change in requirements.' The project manager decides to reclassify this entry. What should it be reclassified as?

   • AA risk effect, because the delay is the impact
   • BAn issue, because the delay is certain
   • CA risk, because it affects the project schedule
   • DA risk cause, because the change in requirements is the source
   Reveal Solution Discussion Select an answer first