PMP Process — Managing Technical Aspects Practice Question
Your project is using a predictive lifecycle. The team has identified a potential risk that could cause a two-week delay. The risk has a probability of 30% and an impact of $50,000. The project has a contingency reserve of $100,000. What is the most appropriate risk response?
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
✓
Add the risk to the risk register, monitor it, and prepare a contingency plan
With a 30% probability and $50,000 impact, this is a moderate risk. It does not warrant transfer (A) because it is not high enough impact, nor immediate funding (D) which would waste contingency. Accepting without action (B) is too passive. The appropriate response is to add the risk to the risk register, monitor it, and prepare a contingency plan to be executed if the risk occurs.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Transfer the risk to the customer through a contract clause
Why it's wrong here
While transferring risk is a valid strategy, it typically involves shifting the impact and ownership to a third party better equipped to manage it. For a moderate risk, immediately transferring it to the customer via a contract clause might be an overreaction, potentially increasing project costs or damaging stakeholder relationships without sufficient justification. This approach is usually reserved for high-impact risks or when the customer is genuinely the most appropriate risk owner.
- ✗
Accept the risk and take no further action, since the contingency reserve is sufficient
Why it's wrong here
Accepting a risk means deciding not to change the project plan to deal with it, but this can be either passive or active. Passive acceptance, which involves taking no further action, is generally not a best practice, even with a sufficient contingency reserve. Active acceptance requires at least monitoring the risk to track its status, probability, and impact, ensuring the contingency plan or reserve is still appropriate and ready for activation if the risk materializes.
- ✓
Add the risk to the risk register, monitor it, and prepare a contingency plan
Why this is correct
For a risk with moderate probability and impact, this approach represents active risk management. Adding it to the risk register formally documents it, ensuring visibility and tracking. Monitoring allows the project team to observe changes in its probability or impact, while preparing a contingency plan outlines specific actions to take if the risk event occurs. This strategy balances proactive planning with efficient resource allocation, avoiding premature expenditure for a risk that may not materialize.
- ✗
Immediately allocate $50,000 from the contingency reserve to mitigate the risk
Why it's wrong here
Contingency reserves are specifically allocated for known-unknown risks that have occurred, providing funds to execute contingency plans when a risk event materializes. Using these funds *before* the risk occurs for mitigation purposes is a misuse of the reserve. Mitigation actions, which aim to reduce the probability or impact of a risk, should typically be funded from the project budget or a management reserve, not the contingency reserve, which is a buffer for unforeseen events.
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Same concept, more angles
7 more ways this is tested on PMP
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 is in the planning phase. The team has identified 50 risks. The project manager wants to prioritize risks for further analysis. Which tool or technique is BEST suited for this?
medium- A.Risk register
- B.SWOT analysis
- C.Decision tree analysis
- ✓ D.Probability and impact matrix
Why D: The probability and impact matrix is the best tool for prioritizing risks because it combines the likelihood of each risk occurring with its potential impact on project objectives, allowing the project manager to rank risks by their overall severity. This prioritization is essential during the planning phase to focus further qualitative or quantitative analysis on the most critical risks.
Variation 2. You are managing a project where a risk identified in the risk register has occurred. The risk response plan calls for mitigation, but the mitigation action will delay the critical path by 2 weeks. The project has no schedule reserve. What should the project manager do FIRST?
hard- A.Avoid implementing the risk response to protect the schedule
- B.Use schedule compression techniques to offset the delay before implementing the response
- ✓ C.Implement the risk response as planned and then submit a change request for the schedule delay
- D.Escalate the issue to the project sponsor for a decision
Why C: The risk response should be implemented as planned to address the risk; then the PM should assess the impact and submit a change request for the schedule delay (since no reserve). Option A is wrong because ignoring the risk response could have negative consequences; the response must be implemented. Option B is wrong because schedule compression techniques may be considered after the impact is known and after implementing the response, not before. Option D is wrong because the PM should first implement the response and assess impact before escalating; escalation is premature at this point.
Variation 3. A project manager is working on a predictive project. A team member identifies a risk that was not previously identified. The risk has a low probability but high impact. What should the PM do FIRST?
easy- ✓ A.Add the risk to the risk register and assess its impact
- B.Escalate the risk to the project sponsor
- C.Accept the risk because it has low probability
- D.Implement a contingency plan immediately
Why A: In predictive project management, the first step upon identifying a new risk is to document it in the risk register and perform a qualitative analysis to assess its probability and impact. This ensures the risk is formally captured and prioritized before any further action, such as escalation or response planning, is taken. Option A correctly follows this standard risk management process.
Variation 4. A project manager is reviewing the project's risk register and identifies several risks that could impact the project. According to PMBOK Guide, which THREE of the following are strategies for negative risks or threats? (Choose three.)
hard- A.Exploit
- B.Enhance
- ✓ C.Avoid
- ✓ D.Transfer
- ✓ E.Mitigate
Why C: Avoid, Transfer, and Mitigate are the three primary strategies for dealing with negative risks or threats as defined in the PMBOK Guide. Avoid involves eliminating the threat entirely by changing the project plan, Transfer shifts the impact of the threat to a third party (e.g., insurance, fixed-price contracts), and Mitigate reduces the probability or impact of the threat to an acceptable threshold. These strategies are specifically designed to address risks with a negative impact on project objectives.
Variation 5. The project team is in the process of identifying risks. Which tool or technique should the project manager use to identify risks?
easy- A.Quality audits
- B.Earned value management
- ✓ C.Brainstorming
- D.Critical path method
Why C: Brainstorming is a common technique for risk identification. Options A, B, and D are used in other processes.
Variation 6. Midway through your project, a key vendor informs you that they cannot deliver a critical component on time, which will impact the critical path. The risk was identified in the risk register with a 'mitigate' response. What should you do FIRST?
medium- A.Inform the sponsor of the delay and request additional budget
- B.Issue a change request to update the project schedule
- ✓ C.Implement the contingency plan that was developed for this risk
- D.Meet with the vendor to negotiate an expedited delivery
Why C: Since the risk was already identified and a 'mitigate' response was planned, the correct first action is to implement the contingency plan that was developed for this risk. This aligns with the PMBOK Guide's risk response execution process, where pre-planned actions are taken immediately when the risk trigger occurs, without waiting for additional approvals or negotiations.
Variation 7. You are the project manager for a large infrastructure upgrade project. The project involves deploying new servers across multiple data centers. During the execution phase, you receive a report that one of the critical servers has failed a security compliance test. The security team states that the server must be reconfigured and retested, which will take two days. However, this server is on the critical path and any delay will push the project completion date. Your sponsor is pressing you to meet the original deadline. The project has a contingency reserve for schedule risks. What is the best course of action?
hard- A.Instruct the team to skip the retest and proceed with deployment to meet the deadline.
- B.Request additional funds from the management reserve to hire external consultants to resolve the issue faster.
- ✓ C.Use the contingency reserve to cover the two-day delay and inform the sponsor that the schedule will be extended accordingly.
- D.Implement schedule compression techniques such as fast tracking to recover the two days.
Why C: The project has a contingency reserve specifically allocated for schedule risks, and the two-day delay caused by the security compliance failure is a known risk that the reserve is designed to cover. Using the contingency reserve allows the team to properly reconfigure and retest the server, ensuring security compliance without compromising project quality, while formally extending the schedule with sponsor awareness.
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This PMP 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 PMP exam.