1.Q6 - You are presented with the following data for the project.
What is the expected monetary value
for these five (5) risks? [image] Question 1 options:
($ 76,000)
Missing information
$ 49,750
($ 26,250)
Question 2 (1 point)
Q6 - If the EMV of a risk has been calculated at $200,000 and this risk exposure has been documented in
the project business case, what is the maximum you could spend to remove the risk completely and be
better off?
Question 2 options:
$ 40,000
$ 20,000
$ 220,000
$ 200,000
Question 3 (1 point)
Q6 - Given the following schedule data: optimistic 12 days, most likely 19 days and pessimistic 31 days.
What would be the likely results of this triangular formula calculation? Given the use of a beta model.
Question 3 options:
12 days
16 days
20 days
18 days
Question 4 (1 point)
Q6 - Of the following which is a form of probability distribution that we have seen during our review in
class?
Question 4 options:
Parallel distribution
Curved distribution
Repetitive distribution
Normal distribution
Question 5 (1 point)
Q6 - You have set with your team contingency around certain tasks as they have risks associated with
them. Your Sponsor asked to precisely provide him with the amount of contingency that you intended to
use for the project. When will this contingency be needed and used?
Question 5 options:
At the start of the project, to get the project initiated
When a risk event actually occurs
During implementation because that is when we have the most budget at stake
When the project is preparing to close in order to balance the books
Question 7 (1 point)
Q6 - A PM is in the process of quantifying the risks for her project. Although several of the experts for
the project are offsite, they have expressed a desire to be included in this process. What is the best way
to achieve this?
Question 7 options:
Use the Delphi technique to gather the feedback
Apply the critical path method
Use Monte Carlo analysis using the internet as a tool
Determine options for recommended corrective action
Question 8 (1 point)
Q6 - Using decision tree analysis, you calculated that Project A has an expected monetary value of $
65,000. In contrast, Project B has an EMV of $ 75,000. Which project is the better option?
Question 8 options:
Project B, because it has the highest EMV
Both, in order to maximize the results
Project A, because it has the lowest EMV
Neither project, because the difference in EMV is not significant
Question 10 (1 point)
Q6 - During risk identification sessions, you and your team have identified more than 150 risks for the
project. You are afraid that evaluating each of these risks quantitatively will cost an enormous amount of
time, while not all of them are really relevant or important enough to justify such work. What should you
do next?
Question 10 options:
Use qualitative risk analysis to prioritize your risks for further action such as
quantitative analysis
Assess the potential impact of each risk qualitatively and further analyze only those risks with high
impact
Identify risk triggers for the risks listed then analyze only those risks for which no trigger could be found
Assess the probability of each risk qualitatively and further analyze only those risks with low probability
You are presented with the following data for the project. What is the expected monetary value for these
five (5) risks?
EMV=Probability×Impact
Given the data:
Risk Event Probability Impact Cost/Benefit EMV
1 0.25 -$4,000 ?
2 0.20 $50,000 ?
3 0.25 -$300,000 ?
4 0.30 $50,000 ?
Risk Event Probability Impact Cost/Benefit EMV
5 0.55 $45,000 ?
Let's calculate the EMV for each risk event:
1. Risk Event 1: EMV=0.25×(−4,000)=−1,000\text{EMV} = 0.25 \times (-4,000) = -
1,000EMV=0.25×(−4,000)=−1,000
2. Risk Event 2: EMV=0.20×50,000=10,000\text{EMV} = 0.20 \times 50,000 =
10,000EMV=0.20×50,000=10,000
3. Risk Event 3: EMV=0.25×(−300,000)=−75,000\text{EMV} = 0.25 \times (-300,000) = -
75,000EMV=0.25×(−300,000)=−75,000
4. Risk Event 4: EMV=0.30×50,000=15,000\text{EMV} = 0.30 \times 50,000 =
15,000EMV=0.30×50,000=15,000
5. Risk Event 5: EMV=0.55×45,000=24,750\text{EMV} = 0.55 \times 45,000 =
24,750EMV=0.55×45,000=24,750
Summing these EMVs gives the total expected monetary value for the five risks:
Total EMV=−1,000+10,000+−75,000+15,000+24,750=−26,250\text{Total EMV} = -1,000 +
10,000 + -75,000 + 15,000 + 24,750 = -26,250Total EMV=−1,000+10,000+
−75,000+15,000+24,750=−26,250
Therefore, the expected monetary value for these five risks is -26,250.
Q6 - Referring to the diagram below, what would you calculate the expected value of Result B?
Page 2:
$200,000 Value 2
20% Probability
Result A
Page 3:
Risk 1
Risk 2
60% Probability
80% Probability
$300,000 Value
Result B
Page 4:
$ 144,000
$ 140,000
Page 5:
$ 240,000
$ 200,000
Total Expected Value of Result B = $340,000.
Q6- Please refer to this Decision Tree which shows the analysis of profit/loss for the two alternatives (i.e.
to build or buy). What should the project Manager recommend? Page 2: 2 Page 3: 3 Page 4: 4 Page 5: 5
Build Build or Buy? Buy Buy Build 25% $10,000 loss 75% $10,000 profit 50% $5,000 loss 50% $12,000
profit PM should recommend a sensitivity analysis before making the decision Either build or buy
build
