Comprehensive Analysis of Risk Management: Identification, Analysis

This assignment solution delves into the core aspects of risk management within projects. It addresses the identification of common risk categories such as scope, schedule, and resource risks, and clarifies the accurate definitions of risk rankings (unacceptable, undesirable, tolerable, and broadly acceptable). The solution also evaluates the components of a Risk Management Plan, highlighting the importance of risk context, identification, analysis, and monitoring. Contemporary methods of risk prioritization, based on probability and impact, are discussed, along with the differentiation between qualitative and quantitative risk analysis. The assignment further explores the significance of understanding both external and internal project environments when assessing risks, and it outlines strategies for treating both negative and positive risks. Finally, it references the AS/NZS ISO 31000:2009 standard, emphasizing the internationally accepted principles for effective risk management.

1. Three common risk categories are Scope risk, Schedule risk and Resource risk.
Which of the following statements most accurately describes one of these risk
categories?
(Select one best answer)
Scope risk refers to deliverables, objectives, project charter
Schedule risk refers to the project budget
Resource risk refers to the Procurement Plan
2. Risks can be ranked as unacceptable, undesirable, tolerable or broadly
acceptable, and you must act upon them accordingly. Which of the following
definitions of these rankings is not correct?
(Select the one incorrect answer)
An unacceptable classification requires stopping the activity
An undesirable classification requires that the risk is treated based on its ranking
A tolerable classification requires the risk to be transferred
A broadly acceptable classification allows the risk to be tolerated
3. The following lists components of a Risk Management Plan and their purpose in
the risk management process. Which of these definitions most accurately
describes a Risk Management Plan component? (Select one best answer)
RISK CONTEXT Identified risks and their categories
RISK IDENTIFICATION Identifies risk standards and their context
RISK ANALYSIS classifies risk
Risk SWOT responds to changes in the risk environment
RISK REGISTER records risk objectives
RISK MONITORING Looks at risk qualitatively and quantitatively
4. Which of the following accurately describes contemporary methods of risk
prioritisation in project management? (Select the one best answer)

Risk prioritisation is generally based on the probability of occurrence and severity
of impact of each identified risk
Some organisations place a higher priority on risks that are likely to happen soon
Organisations place higher priority on those risks that fall on the critical path and
have poor current controls to mitigate the risk
All of these
5. Match the following terms (refer to word list) to their correct meaning.
Word List: Risk Probability, Risk Likelihood, Risk Impact, Risk Consequence, Risk Ranking,
Risk Classification, Inherent Risk, Residual Risk, Qualitative Risk, Quantitative Risk
Meaning Definition
Developing and applying a scale of a 5 x 5 array of elements
with each element representing a different of likelihood and
impact values
Qualitative risk
The probability of the risk even occurring. Risk mitigation
strategies reduce the probability or likelihood of the risk
occurring
Risk probability
This refers to the impact of the risk event, if it occurs Risk impact
This process looks at the risks that have received a high
priority ranking, and then examines the effect of these risks
Quantitative risk
Same as for risk impact Risk consequence
Same as for risk probability Risk likelihood
The score given to a risk by multiplying its probability and
impact
Risk ranking
Defining the classifications by which risk can then be
calculated and analysed
Risk classification
A risk inherited from a previous project Inherent risk
The risk that remains after mitigation and controls are taken
into account
Residual risk
6. Carefully read the following table from an Internet Project Risk Register, and answer
the following question.
ID Risk Event Likelihood Severity
A Project requires new technology and support
structure
Medium Low
B Web infrastructure lacks sufficient transaction
capacity
Medium High

C IS resources are spread too thin High High
D The intranet site suffers a security breach Low High
Which of the following risk events should receive the highest risk level in preparation
for risk evaluation and prioritisation?(Select the one best answer)
project requires new technology and support structure
web infrastructure lacks sufficient transaction capacity
IS resources are spread too thin
The intranet site suffers a security breach
7. When assessing risks we need to understand the external and internal operating
environments of the project. Which of the following relates to the internal risk context of
the project?
(Select the one best answer)
Local, state and federal economies
Regulatory and legal frameworks
Physical and technical infrastructure for the project
Social, community and cultural influences
8. Risk treatment applies to both negative risk and positive risk. Various strategies exist
for treating negative risk and these differ to the way positive risk is treated. Select the
single most accurate statement about industry standards methods for treating risk:
Negative risk can be treated by either avoiding, exploiting, transferring or
mitigating.
Negative risk treated is either avoided, transferred, mitigated or accepted.
Positive risk is treated by either mitigating, sharing, mitigating or accepting.
Positive risk is treated by either exploiting, transferring, mitigating or accepting.
9. The AS/NZS ISO 31000:2009 standard provides the internationally accepted basis for
best practice risk management. The standard includes 11 principles for managing risk
and implies that the Risk Management Plan should meet these criteria.
Listed below are 10 of the principles:
1. Creates value

2. Integral part of organisational processes
3. Part of decision making
4. Explicitly addresses uncertainty
5. Systematic, structured and timely
6. Based on the best available information
7. Takes human and cultural factors into account
8. Transparent and inclusive
9. Dynamic, iterative and responsive to change
10. Facilitates continual improvement and enhancement of the organization
Select the remaining principle from the list below:(Select the one best answer)
Cost effective
Customer focussed
Tailored
10. Quantitative risk analysis, as opposed to other forms of risk analysis, is based on?
(Select the one best answer)
an analysis of the likelihood and impact
adopting given values to the qualitative scales
uses numerical values such as formula or monetary values
all of the above.