PRINCE2F Practice Exam 61 — 20 Questions

Question 1

A project manager is preparing the Business Case for a new project. The expected benefits are $500,000, and the expected costs are $400,000. However, there is a high risk that the benefits may be only $300,000 due to market uncertainty. According to PRINCE2 practices, how should the project manager reflect this in the Business Case?

Choose an answer to begin — your selection is scored in the full session.

Accepted Answer

Include a cost-benefit analysis showing a range of benefits ($300,000-$500,000) and a risk assessment explaining the market uncertainty.. PRINCE2 requires the Business Case to be a living document that reflects realistic projections, including uncertainties. By showing a range of benefits ($300,000–$500,000) and a corresponding risk assessment, the project manager provides a balanced view that supports informed decision-making, aligning with the 'continued business justification' principle.

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Use the lower benefit estimate of $300,000 to be conservative.

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Use the expected benefits of $500,000 as the primary figure, with a note that benefits may vary.

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Omit the risk from the Business Case to avoid discouraging stakeholders.

Question 2

Which process is the Project Board primarily responsible for, according to PRINCE2?

Accepted Answer

Directing a Project. The Project Board is primarily responsible for the 'Directing a Project' process, which covers the overall management and decision-making from project initiation through closure. This process includes authorizing the project, providing key decisions, and ensuring that the project remains viable and aligned with business objectives. The Board does not execute day-to-day management or delivery tasks, which belong to other roles.

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Managing Product Delivery

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Controlling a Stage

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Managing a Stage Boundary

Question 3

Which TWO of the following statements about the Executive role are correct?

Accepted Answer

The Executive chairs the Project Board. The Executive role in PRINCE2 is the chair of the Project Board. The Executive is the ultimate decision-maker for the project, responsible for ensuring the project remains viable and aligned with business objectives. Chairing the Project Board means the Executive leads board meetings, sets the agenda, and ensures decisions are made to authorize key stages and changes.

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The Executive approves all Work Packages

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The Executive manages the project on a day-to-day basis

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The Executive is appointed after the project brief is approved

Question 4

Which THREE of the following are purposes of the Directing a Project process?

Accepted Answer

Confirm the project closure. One of the key purposes of the Directing a Project process is to confirm project closure, ensuring that all objectives have been met and that the project is formally closed. This includes authorizing the final stage and confirming that the project has delivered its products as defined in the Project Initiation Documentation.

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Ensure the project remains viable

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Manage the day-to-day activities of the project

Question 5

Which THREE are objectives of the Initiation Stage?

Accepted Answer

Confirm the Business Case. The Initiation Stage in PRINCE2 is where the project is planned in sufficient detail to decide whether to proceed. Confirming the Business Case (B) is a key objective because it validates that the project remains viable and aligned with corporate objectives before committing significant resources.

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Close the project

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Deliver the project product

Question 6

You are the project manager for a software implementation project in a large retail company. The project is currently in the Initiation Stage. The senior user has provided the requirements, and the senior supplier has estimated that the project will cost £1.2 million and take 18 months. However, during a review of the Business Case, you discover that the expected benefits are only £1.3 million, giving a benefit-cost ratio of just 1.08:1. Additionally, the market conditions are volatile, and there is a risk that a competitor may launch a similar product before your project completes, potentially reducing benefits by 30%. The project board is eager to proceed but wants assurance that the project is viable. What should you do?

Accepted Answer

Update the Business Case with risk-adjusted benefits and present to the board. The PRINCE2 principle of continued business justification requires that the Business Case be updated to reflect current risks and uncertainties. In this scenario, the market volatility and competitor risk could reduce benefits by 30%, dropping the expected benefits to £910,000, which is below the £1.2 million cost, making the project unviable. Presenting this risk-adjusted Business Case to the board allows them to make an informed decision on whether to proceed, rather than proceeding with an overly optimistic view.

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Proceed with the current Business Case as the board is eager

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Escalate to the programme manager without updating the Business Case

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Recommend cancelling the project due to poor viability

Question 7

Which TWO of the following are purposes of the Risk Management practice?

Accepted Answer

To identify and manage risks proactively. The Risk Management practice in PRINCE2 is designed to identify, assess, and control risks proactively throughout the project lifecycle. Option E is correct because understanding risk exposure directly supports informed decision-making by the project board and management team.

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To avoid all risks

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To ensure all risks are transferred to a third party

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To remove uncertainty from the project

Question 8

Which risk response is appropriate for an opportunity?

Accepted Answer

Exploit. For opportunities, PRINCE2 suggests responses: exploit, enhance, share, or reject. Avoid is a threat response.

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Reduce

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Transfer

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Avoid

Question 9

Which TWO of the following are components of the Project Initiation Documentation (PID)?

Accepted Answer

Business Case. The Project Initiation Documentation (PID) is a key PRINCE2 management product that defines the project's scope, justification, and approach. The Business Case is a mandatory component of the PID because it provides the justification for the project, while the Project Plan is also a mandatory component as it defines the schedule, cost, and resource baselines for the entire project.

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Checkpoint Report

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End Stage Report

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Lessons Report

Question 10

A project manager is reviewing the business case for a new software development project. The project is expected to generate significant revenue, but the initial investment is high. According to PRINCE2, which principle is MOST directly being applied when the project manager ensures that the business case remains viable throughout the project?

Accepted Answer

Continued business justification. The PRINCE2 principle of Continued Business Justification requires that the business case, which documents the project's justification, is reviewed and updated at key decision points (e.g., stage boundaries) to ensure the project remains viable. In this scenario, the project manager is actively verifying that the high initial investment is still justified by the expected revenue, directly applying this principle to avoid proceeding with an unviable project.

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Manage by stages

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Learn from experience

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Tailor to suit the project environment

Question 11

The Project Board is considering whether to approve an Exception Plan. Which process should they use to make this decision?

Accepted Answer

Directing a Project. The Project Board is responsible for making key decisions and exercising overall control over the project. When an Exception Plan is submitted, it is the Project Board's role to review and approve or reject it, which is a core activity of the 'Directing a Project' process. This process covers all high-level decision-making, including authorizing deviations from the plan.

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Managing a Stage Boundary

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Controlling a Stage

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Closing a Project

Question 12

Based on the exhibit, what is the purpose of including expected dis-benefits in the Business Case?

Accepted Answer

To provide a balanced view of the project's justification. The PRINCE2 Business Case must include expected dis-benefits to provide a balanced view of the project's justification. Dis-benefits are measurable negative outcomes that, when weighed against benefits, allow the Senior User and Senior Supplier to make an informed go/no-go decision. Without documenting dis-benefits, the Business Case would present an incomplete picture, potentially leading to approval of a project with hidden negative impacts.

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To identify risks that could affect the project

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To show the full cost of the project including ongoing operational costs

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To document the project's key performance indicators

Question 13

A project is forecast to exceed its cost tolerance for the current stage. According to PRINCE2, what should the Project Manager do?

Accepted Answer

Raise an Exception Report to the Project Board and await their direction. According to PRINCE2, when a stage is forecast to exceed its cost tolerance, the Project Manager must escalate the issue to the Project Board by raising an Exception Report. This triggers a formal decision process where the Board can authorize a revised Stage Plan or take other corrective action. Continuing without escalation violates the management by exception principle.

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Increase the project budget to absorb the additional cost and continue with the current Stage Plan

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Close the project immediately as the Business Case is no longer viable

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Continue with the current Stage Plan and report the cost overrun in the next Highlight Report

Question 14

A project is in the Managing a Stage Boundary process. The Project Manager discovers that the stage is likely to overrun its time tolerance. The Project Board has not yet approved the next Stage Plan. What should the Project Manager do?

Accepted Answer

Raise an Exception Report to the Project Board.. When a stage is forecast to exceed tolerance, the Project Manager must produce an Exception Report and submit it to the Project Board for decision. This is part of management by exception.

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Update the Project Plan to reflect the delay.

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Close the project as the Business Case is invalid.

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Continue with the current Stage Plan and submit the next Stage Plan as planned.

Question 15

In PRINCE2, what is the purpose of Project Support?

Accepted Answer

To provide administrative support to the project.. Project Support in PRINCE2 is a role that provides administrative and clerical services to the project management team, such as maintaining files, organizing meetings, and managing project documentation. It does not have decision-making authority over stage plans, assurance, or budget management, which are the responsibilities of other roles like the Project Manager, Project Assurance, and the Executive.

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To approve stage plans.

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To independently assure the Project Board.

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To manage the project's budget.

Question 16

Who is responsible for maintaining the Business Case throughout a PRINCE2 project?

Accepted Answer

Executive. The Executive is the single person responsible for the Business Case throughout the project. PRINCE2 assigns this accountability to the Executive because they own the project's justification and must ensure the Business Case remains viable, aligned with corporate strategy, and that any deviations are formally assessed. The Project Manager maintains the Business Case document on a day-to-day basis, but the Executive retains ultimate responsibility for its content and approval.

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Senior Supplier

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Project Manager

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Senior User

Question 17

Who chairs the Project Board?

Accepted Answer

The Executive. The Executive is the chair of the Project Board in PRINCE2 because they are ultimately accountable for the project's success and have the authority to make key decisions. The Project Board is a decision-making body, and the Executive, as the business representative, chairs it to ensure alignment with organizational objectives. The Project Manager is a board member but does not chair it, as they are responsible for day-to-day management.

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The Project Manager

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The Senior Supplier

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The Senior User

Question 18

Drag and drop the steps to manage a configuration item in PRINCE2 into the correct order.

Accepted Answer

First identify the configuration item, then control changes to it, then record its status, then verify it, and finally report.. Configuration management: identify, control changes, record status, verify, and report.

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First control changes to the configuration item, then identify it, then record its status, then verify it, and finally report.

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First identify the configuration item, then record its status, then control changes, then verify it, and finally report.

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First identify the configuration item, then control changes, then verify it, then record its status, and finally report.

Question 19

What is the difference between a Request for Change and an Off-specification in PRINCE2?

Accepted Answer

A Request for Change proposes a change to a product; an Off-specification indicates that a product does not meet its specification. In PRINCE2, a Request for Change (RFC) is a formal proposal to change a product's specification, baseline, or agreed-upon configuration, while an Off-specification is a notification that a product does not meet its agreed specification or that a planned product cannot be delivered as defined. The RFC seeks approval for a change, whereas the Off-specification reports a deviation that has already occurred or is inevitable.

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A Request for Change is raised by the Project Manager; an Off-specification is raised by the Team Manager

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A Request for Change is always urgent; an Off-specification is not

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There is no difference; they are synonymous

Question 20

Match each PRINCE2 principle to its description.

Accepted Answer

Continued Business Justification: The project must remain viable in terms of costs vs benefits.. The correct matches are: Continued Business Justification: project viability; Learn from Experience: lessons logging; Manage by Stages: stage-by-stage planning; Focus on Products: product delivery. Common confusions include swapping stage management with business justification and exception management with learning from experience.

Answer

Continued Business Justification: The project is divided into manageable stages.

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Learn from Experience: Management by exception is applied to empower decision-making.