Question 1: A project has a 60% chance of earning a $100,000 profit and a 40% chance of incurring a $100,000 loss. What is the Expected Monetary Value (EMV) of the project?
Options:
a) $0
b) $20,000
c) -$20,000
d) $40,000
Explanation:
Thus, the Expected Monetary Value (EMV) of the project is $20,000, making option b) $20,000 the correct choice.
Why This Matters in Certification:
Understanding EMV is critical for project managers to evaluate the financial impact of risks and make informed decisions about whether to proceed with or mitigate risks associated with a project.
Question 2: Assuming that the ends of a range of estimates are ±3 sigma (standard deviations) from the mean, which of the following range estimates involves the LEAST risk?
Options:
a) 30 days, plus or minus 5 days
b) 22 – 30 days
c) Optimistic = 26 days, Most Likely = 30 days, Pessimistic = 33 days
d) Mean of 28 days
Explanation:
When analyzing range estimates, the level of risk is inversely related to the size of the range. A smaller range indicates less uncertainty and therefore less risk. Let’s evaluate each option:
Risk is inversely related to the range size; smaller ranges indicate less risk. After evaluating the ranges provided:
- Option c) Optimistic = 26 days, Most Likely = 30 days, Pessimistic = 33 days has the smallest range of 7 days, making it the option with the least risk.
- Other options have larger ranges, indicating higher levels of uncertainty and risk.
Outliers in control charts are singular measurements outside the bandwidth between an upper and lower control limit, making option A the correct choice.
Question 3: If a risk has a 20 percent chance of happening in a given month, and the project is expected to last five months, what is the probability that the risk event will occur during the fourth month of the project?
Options:
a) Less than 1 percent
b) 20 percent
c) 60 percent
d) 80 percent
Explanation:
The probability of a risk event occurring in any single month is 20%, as stated in the question. Importantly, the probability is independent of the project’s duration or any other months.
In probability theory:
- The occurrence of a risk in any specific month is independent of whether it occurred in other months.
- Therefore, the probability of the risk event occurring in any specific month, including the fourth month, remains 20%.
Key insights:
- The project duration (five months) is irrelevant for calculating the probability of the event occurring in one specific month.
- The question does not ask for the cumulative probability over multiple months, only for the probability of the event in the fourth month.
Final Answer:
The probability that the risk event will occur during the fourth month is 20%.
Question 4: An accepted deadline for a project approaches. However, the project manager realizes only 75% of the work has been completed. The project manager then issues a change request. What should the change request authorize?
Options:
a) Additional resources using the contingency fund
b) Escalation approval to use contingency funding
c) Team overtime to meet the schedule
d) Corrective action based on causes
Explanation:
When a project falls behind schedule, it is essential to address the root cause of the delay and implement an appropriate corrective action. Issuing a change request without identifying and addressing the cause may lead to inefficiency and repeated delays. Here’s why each option is evaluated:
- Option a) Additional resources using the contingency fund:
- Allocating resources may help, but a change request should justify why resources are needed, tied to corrective actions. Contingency funds should not be used without understanding the root cause.
- Option b) Escalation approval to use contingency funding:
- Escalation alone is insufficient. It does not provide a corrective plan or address the underlying issues causing the delay.
- Option c) Team overtime to meet the schedule:
- Overtime might temporarily speed up the project, but it could lead to burnout and inefficiencies. Without knowing why the delay occurred, this is a short-term fix.
- Option d) Corrective action based on causes:
- Corrective action is a proactive approach that identifies the root cause of the delay and ensures the issue is resolved effectively. The change request should focus on implementing this corrective action, which may include reallocating resources, adjusting the schedule, or refining processes.
Final Answer:
The change request should authorize corrective action based on causes to effectively address the delay and complete the project within the revised constraints. Option d is the most comprehensive and strategic approach.
Question 5:
Development is a critical aspect of a project with large size and regulatory and environmental considerations. What is the first thing you should do as a starting point for initial project planning?
Options:
a) Start identifying stakeholders so that you can engage them as required for project planning
b) Hold a project kick-off meeting to inform and engage stakeholders and obtain commitment
c) Review the project charter to get high-level information about the project
d) Share project scope with the involved team to establish a common understanding of project deliverables
Correct Answer:
c) Review the project charter to get high-level information about the project
Explanation:
The project charter is the foundational document that provides high-level information about the project, including objectives, scope, constraints, assumptions, and key stakeholders. Reviewing the charter is the first step in initial project planning because:
- It establishes the foundation: Understanding the project’s purpose and objectives ensures proper alignment with organizational goals.
- It defines authority and resources: The charter authorizes the project and provides details about available resources.
- It guides subsequent steps: After reviewing the charter, you can proceed with stakeholder identification, planning meetings, and detailed scope definition.
Why the Other Options Are Incorrect:
- a) Start identifying stakeholders so that you can engage them as required for project planning:
- Stakeholder identification is important but comes after understanding the high-level project details provided in the charter.
- b) Hold a project kick-off meeting with the aim to inform and engage stakeholders and obtain commitment:
- A kick-off meeting is typically held after initial planning activities, not as the starting point.
- d) Share project scope with the involved team to establish a common understanding about project deliverables:
- Sharing the scope is important but should follow the review of the project charter and stakeholder identification.
Final Answer:
The first thing you should do as a starting point for initial project planning is to review the project charter, making option c the correct choice.
Question 6: The risk will be identified during which risk management process(es)?
Options:
a) Perform Quantitative Risk Analysis and Identify Risks
b) Identify Risks and Monitor and Control Risks
c) Perform Qualitative Risk Analysis and Monitor and Control Risks
d) Identify Risks
Explanation:
The process of identifying risks is explicitly handled in the Identify Risks process, which is part of the Risk Management Plan. During this process:
- Risks are identified, documented, and categorized.
- Risk registers are created, listing all potential risks for the project.
Other risk management processes, such as Perform Qualitative Risk Analysis, Perform Quantitative Risk Analysis, and Monitor and Control Risks, deal with analyzing, prioritizing, and responding to risks, but the actual identification of risks happens solely during the Identify Risks process.
Why the Other Options Are Incorrect:
- a) Perform Quantitative Risk Analysis and Identify Risks:
- Quantitative Risk Analysis evaluates the impact of risks, but it does not identify new risks.
- b) Identify Risks and Monitor and Control Risks:
- Monitoring and Controlling Risks involves tracking identified risks and ensuring effective response actions but does not include the identification of new risks.
- c) Perform Qualitative Risk Analysis and Monitor and Control Risks:
- Qualitative Risk Analysis prioritizes identified risks based on probability and impact. It does not identify new risks.
Final Answer:
The process where risks are identified is Identify Risks, making option d) Identify Risks the correct answer.
Question 7: What does RACI stand for?
Options:
a) Responsible, Accountable, Confirm, Inform
b) Recommended, Accountable, Consulted, Inform
c) Responsible, Accountant, Consulted, Inform
d) Responsible, Accountable, Consulted, Inform
Explanation:
RACI is a widely used responsibility assignment matrix in project management. It defines roles and responsibilities for tasks or deliverables in a project to ensure clarity and accountability.
- Responsible:
- The person(s) who are responsible for completing the task or deliverable.
- They perform the work to achieve the objective.
- Accountable:
- The person who is ultimately accountable for the task’s success or failure.
- This is the decision-maker or owner of the task.
- Consulted:
- The people or groups who provide input, expertise, or advice to the task or deliverable.
- They are typically subject matter experts.
- Inform:
- The people or groups who need to be kept informed about the task’s progress or outcome.
- They are not involved in decision-making or task execution.
Why the Other Options Are Incorrect:
- a) Responsible, Accountable, Confirm, Inform: “Confirm” is not part of the RACI matrix.
- b) Recommended, Accountable, Consulted, Inform: “Recommended” is incorrect; it should be “Responsible.”
- c) Responsible, Accountant, Consulted, Inform: “Accountant” is incorrect; it should be “Accountable.”
Final Answer:
RACI stands for Responsible, Accountable, Consulted, Inform, making option d the correct answer.
Question 8: Which of the following statements is true about a Program?
Options:
a) A Program is a group of related projects
b) A Program is a group of unrelated projects
c) A Program is a part of a big project
d) None of the above
Explanation:
A Program is defined as a group of related projects that are managed in a coordinated manner to obtain benefits and control not available from managing them individually. Programs focus on achieving broader strategic goals and objectives by aligning the efforts of multiple related projects.
Why the Other Options Are Incorrect:
- b) A Program is a group of unrelated projects:
- Programs consist of related projects, often sharing objectives, resources, or stakeholders. Unrelated projects are typically not grouped into a program.
- c) A Program is a part of a big project:
- Programs are not part of a project. Instead, they consist of multiple projects and sometimes include operational work or other initiatives to achieve strategic benefits.
- d) None of the above:
- Option a is correct, so this option is invalid.
Final Answer:
A Program is a group of related projects, making option a the correct answer.
Question 9: The project manager meets with the project team to review lessons learned from previous projects. In what activity is the team involved?
Options:
a) Performance management
b) Scope identification
c) Risk identification
d) Project team status meeting
Explanation:
Reviewing lessons learned from previous projects is a key activity during the Risk Identification process. The team uses this information to identify potential risks for the current project, based on past challenges, successes, and failures. Lessons learned provide valuable insights into what risks might arise and how to address them.
Why the Other Options Are Incorrect:
- a) Performance management:
- Performance management involves monitoring and managing the team’s performance during the project, not reviewing lessons learned.
- b) Scope identification:
- Scope identification focuses on defining the work that needs to be completed, not identifying risks based on historical data.
- d) Project team status meeting:
- A status meeting typically reviews the project’s current progress and performance, not historical lessons learned.
Final Answer:
The team is involved in Risk Identification, making option c the correct answer.
Question 10: During a bidder conference, you see that one bidder is your close friend. What should your next step be?
Options:
a) You will pass some confidential info to him
b) You will disclose this relationship to your management
c) You will resign immediately from the bidding process
d) You will try not to give the contract to him to prove your integrity
Explanation:
In such situations, maintaining transparency and adhering to ethical guidelines is crucial. The best course of action is to disclose the relationship to your management immediately to avoid any appearance of bias or conflict of interest. Once the relationship is disclosed, management can take appropriate steps, such as assigning someone else to oversee the bidding process or ensuring additional oversight.
Why the Other Options Are Incorrect:
- a) You will pass some confidential info to him:
- Sharing confidential information is a serious ethical violation and compromises the fairness of the bidding process.
- c) You will resign immediately from the bidding process:
- Resigning is premature and unnecessary if you disclose the relationship and allow management to decide how to handle the situation.
- d) You will try not to give the contract to him to prove your integrity:
- Intentionally excluding your friend to “prove integrity” is also biased. Fairness requires an impartial process, not personal decisions.
Final Answer:
The correct step is to disclose this relationship to your management, making option b the right choice.