PRINCE2F PRINCE2 Practices Practice Test 35 — 15 Questions

Question 1

A project has identified a risk that a supplier may go bankrupt. The Project Manager decides to purchase insurance against this possibility. Which risk response type has been applied?

Accepted Answer

Transfer. Transfer is the correct risk response because the Project Manager is shifting the financial impact of the supplier bankruptcy risk to a third party (the insurance company). In PRINCE2, Transfer involves passing the risk to another party, often through insurance or contractual terms, without eliminating the risk itself. This response type is appropriate when the risk cannot be reduced or avoided but can be financially covered by an insurer.

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Accept

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Share

Answer

Reduce

Question 2

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 3

Which role is responsible for providing assurance that the project is being managed correctly from a business perspective?

Accepted Answer

Project Assurance. Project Assurance is independent of the Project Manager and reports to the Project Board. Business assurance is one aspect of Project Assurance.

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Project Manager

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Team Manager

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Project Support

Question 4

A Project Manager receives a Checkpoint Report from a Team Manager. What should the Project Manager do with this information?

Accepted Answer

Use it to update the Stage Plan and prepare the Highlight Report. In PRINCE2, the Checkpoint Report is produced by the Team Manager and sent to the Project Manager at a frequency defined in the Work Package. The Project Manager uses this progress information to update the Stage Plan with actual progress and to inform the Highlight Report, which is sent to the Project Board. This is the standard flow of progress information within the 'Controlling a Stage' process.

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File it without action as it is only for information

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Forward it directly to the Project Board

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Send it to Project Assurance for review

Question 5

Which report is produced by the Team Manager and sent to the Project Manager on a regular basis?

Accepted Answer

Checkpoint Report. The Checkpoint Report is produced by the Team Manager and sent to the Project Manager at a frequency defined in the Work Package. It provides status information on the Work Package, including progress, issues, and risks. This is a standard PRINCE2 report.

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Highlight Report

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End Stage Report

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Exception Report

Question 6

Which plan is produced during the Initiating a Project process and covers the entire project at a high level?

Accepted Answer

Project Plan. The Project Plan is created during the Initiating a Project (IP) process and provides a high-level view of the entire project, including the project's scope, cost, timeline, and major deliverables. It is derived from the Project Brief and serves as the baseline against which the project's progress is measured. Because it covers the whole project at a high level, it is the correct answer.

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Exception Plan

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Stage Plan

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Team Plan

Question 7

In the risk management procedure, what is the difference between a risk owner and a risk actionee?

Accepted Answer

Risk owner manages the risk overall; risk actionee performs specific actions. In PRINCE2's risk management procedure, the risk owner is responsible for managing, monitoring, and controlling all aspects of a risk, including ensuring that appropriate responses are implemented. The risk actionee, on the other hand, is assigned to carry out specific risk response actions. Option B correctly captures this distinction: the risk owner manages the risk overall, while the risk actionee performs specific actions.

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Risk owner identifies risks; risk actionee assesses them

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Risk owner is the same as risk actionee in PRINCE2

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Risk owner is on the Project Board; risk actionee is a team member

Question 8

A project is using PRINCE2's product-based planning. What is the first step in this approach?

Accepted Answer

Create a product breakdown structure. Product-based planning starts with identifying the products (outputs) required, i.e., creating a Product Breakdown Structure.

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Write a product description for each product

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Estimate the effort and duration for each activity

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Sequence the activities required to produce the products

Question 9

Which component of the Business Case describes the expected measurable improvements resulting from the project?

Accepted Answer

Expected benefits. The 'Expected benefits' component of the Business Case in PRINCE2 specifically quantifies the measurable improvements that the project will deliver, such as increased revenue, reduced costs, or improved efficiency. These benefits must be defined in measurable terms to enable post-project evaluation against the Business Case. The other options describe different aspects: Reasons justify the project, Major risks identify uncertainties, and Dis-benefits document negative outcomes.

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Reasons

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Major risks

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Dis-benefits

Question 10

During which process does the Project Board authorize the project to proceed with the initiation stage?

Accepted Answer

Directing a Project. The Project Board authorizes the project to proceed with the initiation stage during the 'Directing a Project' process. This process covers the Project Board's decision-making responsibilities, including giving the authorization to start the initiation stage after reviewing the Project Brief and the Stage Plan for initiation. The specific management product used for this authorization is the 'Project Initiation Documentation' (PID) approval, but the decision itself is a key activity in the Directing a Project process.

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Starting up a Project

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Initiating a Project

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Controlling a Stage

Question 11

During the Managing Product Delivery process, the Team Manager delivers products to the Project Manager. What document authorizes the Team Manager to deliver the work?

Accepted Answer

Work Package. A Work Package is the document that authorizes the Team Manager to create one or more products. It contains details of the work to be done and constraints.

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Project Plan

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Stage Plan

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Product Description

Question 12

A project has identified an opportunity to reduce costs by using a new technology. The Project Manager decides to allocate additional resources to increase the likelihood of this opportunity occurring. Which risk response type is being applied?

Accepted Answer

Enhance. The project is taking proactive action to increase the probability of a positive opportunity (cost reduction via new technology). In PRINCE2, the 'Enhance' response is specifically used to increase the likelihood and/or impact of an opportunity. By allocating additional resources to boost the chance of the technology succeeding, the Project Manager is applying the Enhance response, not Exploit (which would assume the opportunity is already certain and seeks to maximize its benefits).

Answer

Share

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Reject

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Exploit

Question 13

Which practice describes the project management team structure and defines roles and responsibilities?

Accepted Answer

Organising. The Organising practice defines the project management team structure, roles, and responsibilities, including the four levels of management (corporate/programme management, project board, project manager, and team manager) and the three project interests (business, user, supplier). It establishes clear accountability and authority within the PRINCE2 project management team.

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Plans

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Business Case

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Progress

Question 14

Which THREE of the following are true about the role of the Project Board?

Accepted Answer

It is accountable for the project's success. Option A is correct because in PRINCE2 the Project Board is the project's ultimate decision-making authority and is accountable to the business for the project's success or failure. Option B is correct because the Project Board gives unified direction by making key decisions, authorizing each stage, and providing the resources and guidance the project needs. Option E is correct because the Project Board is composed of the three project interests: the Executive (business), the Senior User (user), and the Senior Supplier (supplier). Option C is not correct because the Project Manager reports to the Project Board and manages the project on its behalf; the Project Manager is not a Project Board member. Option D is not correct because day-to-day management is delegated to the Project Manager, while the Project Board focuses on direction and control at a higher level.

Answer

It includes the Project Manager as a member

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It is responsible for day-to-day management of the project

Question 15

Which TWO of the following statements about the Quality Review technique are correct?

Accepted Answer

It is a form of quality control. Option B is correct because the Quality Review technique in PRINCE2 is a quality control activity: it is applied to a product to check that it conforms to its quality criteria, complementing quality assurance (which focuses on the process). Option D is correct because the technique is explicitly a structured, team-based review of a product (document, plan, or other deliverable) whose purpose is to identify defects and deviations from the product's quality criteria, following defined roles and steps. Option A is wrong because Quality Reviews are conducted by a review team (reviewer, approver, presenter, administrator, etc.) assembled for the product, not by the Project Board, whose role is governance and approval of plans and business justification. Option C is wrong because assessing the viability of the Business Case is the purpose of the Business Case itself and the continued business justification principle, not of the Quality Review technique. Option E is wrong because testing the product against its specification is the role of quality testing/inspection methods (e.g., testing, piloting), whereas Quality Review is a specific inspection technique for reviewing products against their quality criteria.

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It is performed by the Project Board

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It assesses the viability of the Business Case

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It is used to test the product against its specification