Task 3 Confirm Risk Thresholds Based on Risk Appetites PMI-RMP Practice Questions (Page 2)

Questions 6–10

1. 6expert · hard

   A project manager is leading a risk threshold setting session. The project sponsor wants to set a high threshold for technical risks to encourage innovation, but the chief engineer is concerned about the impact on product quality and wants a low threshold. The project manager has tried to facilitate a discussion, but the two are at an impasse. What is the most effective conflict resolution technique in this situation?

   • ASet the threshold at the midpoint between the two positions as a compromise.
   • BAsk the project sponsor to make the final decision, as they have the authority.
   • CPostpone the decision until more data is available on the potential risks.
   • DUse a 'principled negotiation' approach, focusing on interests rather than positions.
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2. 7foundation · easy

   What does 'organizational risk absorption capacity' refer to?

   • AThe risk budget allocated for a single project.
   • BThe maximum number of risks that can be logged in the risk register.
   • CThe total amount of risk the organization can withstand across different categories without jeopardizing its objectives.
   • DThe amount of risk that can be transferred to insurance providers.
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4. 8application · medium

   A software development company has a risk appetite that is 'risk-seeking' for innovation but 'risk-averse' for data privacy. The project manager is setting risk thresholds for a new cloud-based application. Which set of thresholds best reflects this risk appetite?

   • AThresholds based on the project manager's personal risk tolerance.
   • BHigh threshold for data privacy risks and low threshold for innovation risks.
   • CEqual thresholds for both categories to maintain a balanced approach.
   • DLow threshold for data privacy risks and high threshold for innovation risks.
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5. 9foundation · easy

   Which method is appropriate for calculating risk absorption capacity for the financial category?

   • AAnalyzing the organization's cash flow and profit margins to determine the maximum acceptable financial loss.
   • BReviewing the project schedule to identify potential delays.
   • CCounting the number of financial risks in the risk register.
   • DConducting a stakeholder survey on risk tolerance.
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6. 10application · medium

   A multinational company is launching a new product line. The executive team has a high risk appetite for market expansion but a low risk appetite for regulatory compliance. The project manager is developing the risk management plan and needs to set thresholds for a new product launch. Which approach best aligns the project risk thresholds with the organization's risk appetite?

   • ASet a single, uniform risk threshold for all risk categories based on the overall corporate risk appetite statement.
   • BSet thresholds at the industry average to ensure competitiveness and avoid being too conservative or aggressive.
   • CSet higher thresholds for market-related risks and lower thresholds for regulatory risks, reflecting the stated appetites.
   • DSet thresholds based on the risk appetite of the project sponsor, who has the final authority on risk decisions.
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