- A
Avoid the risk by selecting a different machine that is available from multiple suppliers.
Why wrong: Avoidance may not be feasible as the machine is specified in the contract and changing may cause delays and cost overruns.
- B
Mitigate the risk by establishing a backup supplier.
Why wrong: While mitigation is good, establishing a backup supplier may not be possible pending contract termination with the original supplier. Transfer is more direct.
- C
Transfer the risk by requiring the supplier to obtain a performance bond.
A performance bond transfers the financial risk to a third party, protecting the project.
- D
Accept the risk and document it in the risk register.
Why wrong: Acceptance is passive and not appropriate for high-probability high-impact risks.
Quick Answer
The correct answer is to transfer the risk by requiring the supplier to obtain a performance bond. This risk transfer strategy is the most appropriate for a high-impact, high-probability threat because it shifts the financial burden of the supplier’s potential bankruptcy to a third-party surety, ensuring the project is compensated if the critical machine is not delivered. On the Certified Associate in Project Management CAPM exam, this scenario tests your ability to apply risk response strategies within a predictive project management framework, specifically distinguishing transfer from mitigation or avoidance. A common trap is confusing transfer with mitigation—remember, transfer does not eliminate the risk but assigns the financial consequences to another party, while mitigation would involve actions like sourcing a backup supplier. For a memory tip, think of a performance bond as an insurance policy for the project’s critical path: if the supplier fails, the bond pays out, keeping your schedule intact.
CAPM Predictive Plan-Based Methodologies Practice Question
This CAPM practice question tests your understanding of predictive plan-based methodologies. Compare every option against the stated constraints before choosing — the best answer satisfies all requirements, not just the most obvious one. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A manufacturing company is planning to install a new production line using a predictive project management approach. The project has a fixed price contract with a supplier for a critical machine. During the plan risk management process, the project manager identifies a risk that the key supplier might declare bankruptcy before delivering the machine. This risk has a high probability due to the supplier's financial instability, and a high impact because the machine is on the critical path and has a long lead time. The project manager must decide on a risk response strategy that will minimize the potential impact on the project. The team suggests several options.
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue:
"minimum / minimize"Why it matters: Asks for the least resource use — fewest addresses, smallest subnet, lowest overhead. Eliminate over-provisioned options even if they would technically work.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Transfer the risk by requiring the supplier to obtain a performance bond.
Transfer via performance bond is the most appropriate response for this high-probability, high-impact risk. Option B is correct.
Key principle: NAT direction and interface roles matter as much as the IP address mapping. Inside/outside designation controls which traffic is translated.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Avoid the risk by selecting a different machine that is available from multiple suppliers.
Why it's wrong here
Avoidance may not be feasible as the machine is specified in the contract and changing may cause delays and cost overruns.
- ✗
Mitigate the risk by establishing a backup supplier.
Why it's wrong here
While mitigation is good, establishing a backup supplier may not be possible pending contract termination with the original supplier. Transfer is more direct.
- ✓
Transfer the risk by requiring the supplier to obtain a performance bond.
Why this is correct
A performance bond transfers the financial risk to a third party, protecting the project.
Clue confirmation
The clue word "minimum / minimize" in the question point toward this answer.
Related concept
Static NAT maps one inside address to one outside address.
- ✗
Accept the risk and document it in the risk register.
Why it's wrong here
Acceptance is passive and not appropriate for high-probability high-impact risks.
Common exam traps
Common exam trap: NAT rules depend on direction and matching traffic
NAT is not only about the public address. The inside/outside interface roles and the ACL or rule that matches traffic are just as important.
Detailed technical explanation
How to think about this question
NAT questions usually test address translation, overload/PAT behaviour, static mappings and whether the right traffic is being translated. Read the interface direction and address terms carefully.
KKey Concepts to Remember
- Static NAT maps one inside address to one outside address.
- PAT allows many inside hosts to share one public address using ports.
- Inside local and inside global describe the private and translated addresses.
- NAT ACLs identify traffic for translation, not always security filtering.
TExam Day Tips
- Identify inside and outside interfaces first.
- Check whether the scenario needs static NAT, dynamic NAT or PAT.
- Do not confuse NAT matching ACLs with normal packet-filtering intent.
Key takeaway
NAT direction and interface roles matter as much as the IP address mapping. Inside/outside designation controls which traffic is translated.
Real-world example
How this comes up in practice
A small business has 20 workstations on the 192.168.1.0/24 network and one public IP from its ISP. The router uses PAT (NAT overload) so all 20 devices share one public address using different source ports. NAT questions test whether you understand the four address terms and which direction each translation applies.
What to study next
Got this wrong? Here's your next step.
Review the four NAT address types (inside local, inside global, outside local, outside global), PAT port overload, and static vs dynamic NAT use cases. Then practise related CAPM NAT questions on configuration and troubleshooting.
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Predictive Plan-Based Methodologies — study guide chapter
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FAQ
Questions learners often ask
What does this CAPM question test?
Predictive Plan-Based Methodologies — This question tests Predictive Plan-Based Methodologies — Static NAT maps one inside address to one outside address..
What is the correct answer to this question?
The correct answer is: Transfer the risk by requiring the supplier to obtain a performance bond. — Transfer via performance bond is the most appropriate response for this high-probability, high-impact risk. Option B is correct.
What should I do if I get this CAPM question wrong?
Review the four NAT address types (inside local, inside global, outside local, outside global), PAT port overload, and static vs dynamic NAT use cases. Then practise related CAPM NAT questions on configuration and troubleshooting.
Are there clue words in this question I should notice?
Yes — watch for: "minimum / minimize". Asks for the least resource use — fewest addresses, smallest subnet, lowest overhead. Eliminate over-provisioned options even if they would technically work.
What is the key concept behind this question?
Static NAT maps one inside address to one outside address.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Same concept, more angles
1 more ways this is tested on CAPM
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A project manager is creating a risk response plan for a predictive construction project. One risk has a high probability and high impact. The team decides to purchase insurance to cover potential losses. Which risk response strategy is being used?
hard- A.Avoid
- B.Accept
- C.Mitigate
- ✓ D.Transfer
Why D: Option B is correct because transferring risk involves shifting the impact to a third party, such as insurance. Option A is wrong because mitigation reduces probability or impact, not transfer. Option C is wrong because avoidance eliminates the risk entirely. Option D is wrong because acceptance acknowledges the risk without action.
Last reviewed: Jun 24, 2026
This CAPM practice question is part of Courseiva's free PMI certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CAPM exam.
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