PMI PMP Project Management

Category - Cost Management

True or false: A contingency reserve should be a specific percentage of each budget:
  1. True
  2. False
Explanation
Answer: False. Contingency reserve is tied to risks identified (“If X event occurs, a certain amount can be taken out of reserve to deal with it”). As such, it should be an amount that reflects the inherent risk of possible events. This is a tough true/false question to drive home that exact point.

Key Takeaway: For example, after risk identification, one project might be much riskier than another. This one should probably have a larger contingency reserve.
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