Practice Quiz

PMI PMP Project Management

Category - Risk Management

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Boris has identified some key risks in a new project he is leading. What are the acceptable ways to deal with this risk?
  1. Say this risk is fine and do nothing.
  2. Invest in a resource to monitor the specific risk.
  3. Pay another contractor to execute a piece of the project that seems risky with a penalty if they fail.
  4. Pay an insurer to compensate the company with a cash payment if the risk does not work out.
Explanation
Answer: A, B, C, D - These are all acceptable options as long as the project manager has properly analyzed the risk and decided that it is the best decision. Corporations must take risk in order to be successful.

Key Takeaway: The first time most people get asked this question, they often think doing nothing is not an option. In some cases, risks are so small in their expected value that they should be ignored and accepted. So global thermonuclear holocaust may be a risk for your project, but it should probably just be accepted. In other cases, insurance or outsourcing may be too expensive, and there may be no possible mitigation strategies, so the project manager must decide with his or her stakeholders whether to accept the risk and proceed with the project.
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