A project manager is updating the risk management approach for a construction project. The project has a fixed budget and the sponsor has set aside a specific amount of money to be used only for implementing risk responses. The project manager needs to document how this money will be accessed and controlled. What should the project manager include in the risk management approach?

The risk response types that will be used for each identified risk

The risk tolerance of the project board and the escalation thresholds for risks

A description of the risk budget and the process for requesting and approving funds from it

A list of all identified risks with their probability and impact scores

A project team is evaluating a risk that could cause a 15% cost overrun. The team is divided: some members believe the probability is high based on a recent similar project, while others believe it is low based on long-term trends. The project manager needs to make an objective assessment. What is the best approach?

Ask the project board to decide the probability

Adopt the lower probability estimate to avoid overstating the risk

Adopt the higher probability estimate to be safe

Use a combination of historical data and expert judgment to estimate the probability

A project team is analyzing a risk that could cause a 20% cost overrun. The team has conflicting opinions: the project manager believes the probability is 30% based on a recent similar project, while a team member believes it is 10% based on long-term industry data. The project manager needs to make a decision that balances both views. What is the best approach?

Adopt the higher estimate of 30% to be conservative

Adopt the lower estimate of 10% to avoid overstating the risk

Use a weighted average of the two estimates, giving more weight to the more reliable data source

Ask the project board to decide the probability

How can the impact of decision bias be mitigated in risk management?

Using only quantitative data and ignoring qualitative judgments

Using structured risk assessment techniques and seeking input from multiple perspectives

Avoiding discussion of risks to prevent bias from influencing the team

Relying on the project manager's experience to make all risk decisions

PRINCE2 Foundation (Version 7)

Domain 4Objective 30

4.5.5 Describe the Guidance for Effective Management of Risk PRINCE2-FOUNDATION-VERSION-7 Practice Questions (Page 6)

Part of the Understand the PRINCE2 practices and how they are applied throughout the project domain, which accounts for 60% of the PRINCE2-FOUNDATION-VERSION-7 exam. PeopleCert does not publish an official question count, but from its 60-minute exam (~25–40 total, ~15–24 in this domain), expect 1–1 from this objective — we provide 31 practice questions to prepare you well beyond it. (estimate)

31questions here

7free pages

7concepts

60%of the exam

Questions 26–30

26application · medium
A project manager is updating the risk management approach for a construction project. The project has a fixed budget and the sponsor has set aside a specific amount of money to be used only for implementing risk responses. The project manager needs to document how this money will be accessed and controlled. What should the project manager include in the risk management approach?
Select an answer first
27application · medium
A project team is evaluating a risk that could cause a 15% cost overrun. The team is divided: some members believe the probability is high based on a recent similar project, while others believe it is low based on long-term trends. The project manager needs to make an objective assessment. What is the best approach?
Select an answer first
28expert · hard
A project team is analyzing a risk that could cause a 20% cost overrun. The team has conflicting opinions: the project manager believes the probability is 30% based on a recent similar project, while a team member believes it is 10% based on long-term industry data. The project manager needs to make a decision that balances both views. What is the best approach?
Select an answer first
29foundation · easy
How can the impact of decision bias be mitigated in risk management?
Select an answer first
30foundation · easy
Which risk response type involves taking action to reduce the probability or impact of a threat?
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4.5.5 Describe the Guidance for Effective Management of Risk PRINCE2-FOUNDATION-VERSION-7 Practice Questions (Page 6)

Questions 26–30

How can the impact of decision bias be mitigated in risk management?

Which risk response type involves taking action to reduce the probability or impact of a threat?

Keep studying — Understand the PRINCE2 practices and how they are applied throughout the project