1What is the main purpose of defining project objectives?
Objectives
Easy
A.To state the desired project outcomes
B.To eliminate all project constraints
C.To replace the project schedule
D.To assign salaries to team members
Correct Answer: To state the desired project outcomes
Explanation:
Project objectives clearly describe what the project is expected to achieve.
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2What does a project schedule primarily show?
Project Schedule
Easy
A.The timing and sequence of activities
B.The programming languages used
C.The legal structure of the organization
D.The personal preferences of stakeholders
Correct Answer: The timing and sequence of activities
Explanation:
A project schedule shows when activities should occur and the order in which they should be completed.
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3Which activity is part of managing a project task?
Managing the task
Easy
A.Tracking progress against estimates
B.Ignoring incomplete work
C.Changing objectives every day
D.Removing all task deadlines
Correct Answer: Tracking progress against estimates
Explanation:
Task management includes monitoring actual progress and comparing it with planned estimates.
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4Why should a project manager regularly review the project plan?
Managing the Plan
Easy
A.To avoid communicating with the team
B.To make every activity independent
C.To keep the plan aligned with progress
D.To guarantee that no risk will occur
Correct Answer: To keep the plan aligned with progress
Explanation:
Regular reviews help ensure that the plan reflects current progress, issues, and priorities.
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5In a network planning model, what do links between activities usually represent?
Network Planning Model
Easy
A.Customer payments
B.Task dependencies
C.Employee salaries
D.Software licenses
Correct Answer: Task dependencies
Explanation:
Links in a network model show the dependency relationships and required sequence between activities.
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6What does the time dimension add to an activity plan?
Time Dimension
Easy
A.A record of staff qualifications
B.A list of programming errors
C.Durations and timing information
D.Detailed instructions for replacing every original project objective
Correct Answer: Durations and timing information
Explanation:
The time dimension identifies how long activities take and when they are expected to occur.
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7What is the critical path in a project network?
Identifying Critical Path
Easy
A.The path with the fewest activities
B.The longest-duration dependent path
C.The path chosen by the customer
D.The path with the lowest cost
Correct Answer: The longest-duration dependent path
Explanation:
The critical path is the longest sequence of dependent activities and determines the minimum project duration.
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8What should normally happen before a proposed project change is approved?
Managing Change
Easy
A.Its cost should always be ignored
B.All milestones should be deleted
C.The project team should be replaced
D.Its impact should be assessed
Correct Answer: Its impact should be assessed
Explanation:
A proposed change should be assessed for its effects on scope, time, cost, quality, and risk.
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9When is it appropriate to readjust project milestones?
Readjusting Goals and Milestones
Easy
A.When the manager wants to remove all progress measures from the project
B.Whenever documentation becomes inconvenient
C.Whenever a team member arrives late
D.When approved changes affect the timeline
Correct Answer: When approved changes affect the timeline
Explanation:
Milestones may need adjustment when approved changes alter the project's expected timeline or deliverables.
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10What is a project risk?
Introduction to Risk
Easy
A.A routine meeting with stakeholders
B.A guaranteed financial loss
C.A completed project activity
D.An uncertain event affecting objectives
Correct Answer: An uncertain event affecting objectives
Explanation:
A risk is an uncertain event or condition that may affect one or more project objectives.
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11Which of the following is an example of a technical risk?
Categories of Risk
Easy
A.A customer delaying an invoice payment
B.A detailed company policy covering recruitment, promotion, and retirement
C.A new technology failing to perform
D.A developer taking annual leave
Correct Answer: A new technology failing to perform
Explanation:
Technical risks arise from technology, design, integration, performance, or implementation issues.
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12Which risk response aims to reduce the probability or impact of a threat?
Dealing with Risk
Easy
A.Acceptance
B.Mitigation
C.Transfer
D.Exploitation
Correct Answer: Mitigation
Explanation:
Risk mitigation uses actions that reduce the likelihood or negative impact of a threat.
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13What is the main output of risk identification?
Risk Identification
Easy
A.A guarantee that the project will finish without uncertainty
B.A list of identified risks
C.A fixed organizational budget
D.A completed software product
Correct Answer: A list of identified risks
Explanation:
Risk identification produces a documented list of events or conditions that could affect the project.
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14Which two factors are commonly considered when assessing a risk?
Risk Assessment
Easy
A.Office size and location
B.Probability and impact
C.Color and shape
D.Salary and job title
Correct Answer: Probability and impact
Explanation:
Risks are commonly assessed by estimating how likely they are and how strongly they could affect the project.
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15What is a contingency plan?
Risk Planning
Easy
A.A plan for removing every deadline
B.A plan that permanently prevents any project condition from changing
C.A plan for avoiding all documentation
D.A plan used if a risk occurs
Correct Answer: A plan used if a risk occurs
Explanation:
A contingency plan defines actions to take if a particular risk event actually occurs.
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16Why are risks monitored throughout a project?
Risk Management
Easy
A.To detect changes in risk status
B.To ensure that every task receives exactly the same amount of time
C.To keep the project scope secret
D.To prevent stakeholders from reporting issues
Correct Answer: To detect changes in risk status
Explanation:
Monitoring reveals whether known risks have changed and whether new risks have appeared.
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17Which event is most likely to create schedule risk?
Evaluating Risk to the Schedule
Easy
A.A non-project department changing the color of its internal forms
B.A critical activity taking longer than planned
C.A meeting ending at its planned time
D.A completed task costing less than expected
Correct Answer: A critical activity taking longer than planned
Explanation:
A delay in a critical activity can directly delay the project's planned completion date.
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18In PERT, which three estimates are used to calculate expected activity time?
Applying the PERT Technique
Easy
A.Planned, approved, and completed
B.Low, medium, and high cost
C.Early, normal, and late
D.Optimistic, most likely, and pessimistic
Correct Answer: Optimistic, most likely, and pessimistic
Explanation:
PERT uses optimistic, most likely, and pessimistic time estimates. The expected time is .
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19What does Risk Adjusted Portfolio Performance (RAPP) consider when evaluating a portfolio?
Risk Adjusted Portfolio Performance (RAPP)
Easy
A.Return without considering risk
B.Return in relation to risk
C.Every project manager's preferred reporting format and meeting schedule
D.Only the number of projects
Correct Answer: Return in relation to risk
Explanation:
RAPP evaluates portfolio performance by considering the return achieved relative to the risk taken.
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20What is a basic purpose of diversification in a project portfolio?
Portfolio Optimisation and Diversification 2.0
Easy
A.To make all projects use identical technology
B.To remove the need for project selection
C.To spread exposure across different projects
D.To place all resources in one project
Correct Answer: To spread exposure across different projects
Explanation:
Diversification spreads exposure across projects so that the portfolio is less dependent on a single project's outcome.
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21A software project has the objective "Improve system performance." Which revised objective is most suitable for activity planning?
Objectives
Medium
A.Reduce average API response time from 800 ms to 400 ms by release date
B.Replace the current API with a more modern implementation
C.Make the API significantly faster before the next major release
D.Improve API performance whenever development resources are available
Correct Answer: Reduce average API response time from 800 ms to 400 ms by release date
Explanation:
This objective is specific, measurable, and time-bound, so activities and progress can be planned against it.
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22A project schedule shows that testing must begin on 10 June, but coding is now expected to finish on 14 June. What should the project manager do first?
Project Schedule
Medium
A.Ask testers to begin all testing before the code is available
B.Update the schedule dependencies and assess the effect on later activities
C.Keep the original schedule unchanged until the next status meeting
D.Extend every remaining activity by the same number of days
Correct Answer: Update the schedule dependencies and assess the effect on later activities
Explanation:
The coding delay may affect dependent tasks and the completion date. Updating the schedule reveals the actual impact before corrective action is selected.
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23A developer reports that a five-day task is 80% complete after four days, but the remaining work depends on an unresolved technical issue. What is the best management response?
Managing the task
Medium
A.Transfer the entire task immediately to another available developer
B.Record the task as 80% complete and assume it will finish on time
C.Mark the task complete because most planned effort has been consumed
D.Review the blocker, estimate the remaining effort, and assign corrective action
Correct Answer: Review the blocker, estimate the remaining effort, and assign corrective action
Explanation:
Percentage complete alone does not show whether a task is under control. The blocker and remaining effort must be assessed before deciding how to respond.
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24During execution, actual effort is consistently 15% higher than planned effort. Which action best supports effective management of the plan?
Managing the Plan
Medium
A.Replace the baseline with actual values after every reporting period
B.Compare actuals with the baseline and reforecast remaining work
C.Ignore the variance until the final project phase begins
D.Reduce reported effort so that it matches the original estimates
Correct Answer: Compare actuals with the baseline and reforecast remaining work
Explanation:
The baseline should remain available for comparison, while forecasts should be updated using current performance data.
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25In a project network, tasks B and C can start only after task A finishes. Task D can start only after both B and C finish. Which dependency structure represents this situation?
Network Planning Model
Medium
A.A splits into B and C, which merge before D
B.A leads to B, B leads to C, and C leads to D
C.A and D run together before B and C can start
D.B and C split into A, which then leads to D
Correct Answer: A splits into B and C, which merge before D
Explanation:
B and C are parallel successors of A, while D is a successor that requires both parallel branches to be completed.
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26A task has an earliest start of day 6 and an earliest finish of day 10. If project days are counted using finish minus start duration, what is the task duration?
Time Dimension
Medium
A.5 days
B.16 days
C.6 days
D.4 days
Correct Answer: 4 days
Explanation:
Using the stated convention, duration is days.
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27A network has three paths with durations of 18, 23, and 20 days. Assuming no scheduling constraints other than the network dependencies, which statement is correct?
Identifying Critical Path
Medium
A.All paths are critical because they belong to the same project
B.The 18-day path is critical because it has the least work
C.The 23-day path is critical because it determines project duration
D.The 20-day path is critical because it is closest to the average
Correct Answer: The 23-day path is critical because it determines project duration
Explanation:
The longest-duration path through the network determines the earliest project completion date and is therefore the critical path.
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28A customer requests an additional reporting feature halfway through development. What should happen before the feature is added to the project baseline?
Managing Change
Medium
A.Its impact should be analysed and approval obtained through change control
B.The project manager should add it without changing cost or schedule
C.The customer should exchange it informally for an unfinished test activity
D.The development team should implement it during available spare time
Correct Answer: Its impact should be analysed and approval obtained through change control
Explanation:
Formal change control evaluates effects on scope, cost, schedule, quality, and risk before an approved baseline is changed.
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29A mandatory regulatory update makes the original release date impossible, even after reasonable schedule compression. What is the most appropriate response?
Readjusting Goals and Milestones
Medium
A.Retain the milestone and remove regulatory work from progress reports
B.Declare the original goal achieved when development reaches code complete
C.Renegotiate the release milestone using documented impact information
D.Ask the team to work indefinitely without changing project assumptions
Correct Answer: Renegotiate the release milestone using documented impact information
Explanation:
When a valid constraint makes a goal infeasible, the milestone should be formally readjusted using evidence and stakeholder agreement.
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30Which situation is a project risk rather than an issue?
Introduction to Risk
Medium
A.A key supplier may deliver the database licence two weeks late
B.The database licence was not delivered on its agreed date
C.The approved budget has already been exceeded by ten percent
D.The test server failed yesterday and remains unavailable
Correct Answer: A key supplier may deliver the database licence two weeks late
Explanation:
A risk is an uncertain future event. The other situations have already occurred and should be managed as current issues.
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31A project depends on a new framework that the development team has never used. How should this risk primarily be categorized?
Categories of Risk
Medium
A.Technical risk
B.Environmental risk
C.Commercial risk
D.Political risk
Correct Answer: Technical risk
Explanation:
Uncertainty arising from unfamiliar technology, tools, architecture, or implementation methods is primarily a technical risk.
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32A project avoids possible incompatibility by replacing an experimental component with a proven supported component. Which risk response is being used?
Dealing with Risk
Medium
A.Escalation
B.Avoidance
C.Acceptance
D.Transfer
Correct Answer: Avoidance
Explanation:
Replacing the source of uncertainty removes the identified threat, which is a risk-avoidance response.
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33A project manager wants to identify risks involving interfaces between development, security, operations, and an external supplier. Which technique is most appropriate?
Risk Identification
Medium
A.Schedule compression performed before consulting the delivery teams
B.Budget comparison using figures from the previous accounting period
C.Facilitated workshop with representatives from all involved groups
D.Private review performed only by the project manager
Correct Answer: Facilitated workshop with representatives from all involved groups
Explanation:
A cross-functional workshop exposes assumptions, handoff problems, and interface risks that may be missed by one person or one team.
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34Risk A has a 30% probability of causing a $40,000 loss. Risk B has a 60% probability of causing a $15,000 loss. Based only on expected monetary value, which risk has greater exposure?
Risk Assessment
Medium
A.Risk A, with an exposure of $12,000
B.Risk B, with an exposure of $12,000
C.Risk A, with an exposure of $9,000
D.Risk B, with an exposure of $24,000
Correct Answer: Risk A, with an exposure of $12,000
Explanation:
Expected exposure is . Risk A is , while Risk B is .
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35A risk plan states that a backup supplier will be contracted if the primary supplier misses the prototype delivery date. What does the missed delivery date represent?
Risk Planning
Medium
A.A probability score for the threat
B.A residual risk after project closure
C.A trigger for the contingency response
D.A benefit produced by risk acceptance
Correct Answer: A trigger for the contingency response
Explanation:
A trigger is an observable condition indicating that a planned contingency action should begin.
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36A high-priority risk was mitigated, but a smaller chance of failure remains. How should the project manager handle the remaining exposure?
Risk Management
Medium
A.Treat it as an issue regardless of whether it occurs
B.Delete it because the original response has been completed
C.Move it into the schedule without assigning an owner
D.Record it as residual risk and continue monitoring it
Correct Answer: Record it as residual risk and continue monitoring it
Explanation:
Mitigation may reduce rather than eliminate exposure. The remaining residual risk should be documented, owned, and monitored.
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37A non-critical task has 3 days of total float and may be delayed by 5 days. If no corrective action is taken, what is the likely schedule effect?
Evaluating Risk to the Schedule
Medium
A.The critical path becomes 5 days shorter
B.The project completion must slip by 3 days
C.The project completion may slip by 2 days
D.The task can slip by 5 days without any effect
Correct Answer: The project completion may slip by 2 days
Explanation:
The first 3 days of delay consume the available float. The remaining 2 days can affect the project completion date or create a new critical path.
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38A task has an optimistic estimate of 4 days, a most likely estimate of 7 days, and a pessimistic estimate of 16 days. Using PERT, what is its expected duration?
Applying the PERT Technique
Medium
A.8 days
B.10 days
C.7 days
D.9 days
Correct Answer: 8 days
Explanation:
PERT uses . Therefore, days.
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39Project X and Project Y both have an expected return of 12%, but X has substantially lower uncertainty and downside exposure. Under a risk-adjusted portfolio performance approach, which decision is most reasonable?
Risk Adjusted Portfolio Performance (RAPP)
Medium
A.Reject both projects because risk-adjusted analysis ignores expected return
B.Prefer Project X because it offers the same return with lower risk
C.Prefer Project Y because higher risk always produces greater value
D.Treat both projects as identical because their expected returns match
Correct Answer: Prefer Project X because it offers the same return with lower risk
Explanation:
Risk-adjusted performance considers both expected benefit and risk. With equal expected returns, the lower-risk project has better risk-adjusted performance.
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40A software portfolio contains five projects that all depend on the same external cloud platform. Which change would most improve diversification?
Portfolio Optimisation and Diversification 2.0
Medium
A.Increase funding equally across all five existing projects
B.Add another project using the same platform and delivery team
C.Schedule all five projects to release during the same month
D.Add a valuable project with low dependence on that cloud platform
Correct Answer: Add a valuable project with low dependence on that cloud platform
Explanation:
Diversification improves when projects have less correlated exposure. A project with low dependence on the shared platform reduces concentration risk.
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41A project has three stated objectives: deliver by 30 June, keep expenditure below $800,000, and reduce production defects by 40%. Midway through execution, forecasts show that at most two objectives can be fully achieved. Which action best preserves rational project control?
Objectives
Hard
A.Continue pursuing all objectives and defer trade-offs until final acceptance
B.Treat the budget as fixed because financial objectives always outrank quality
C.Ask the sponsor to rank the objectives and approve measurable tolerance limits
D.Replace the objectives with activity-level targets owned by the project team
Correct Answer: Ask the sponsor to rank the objectives and approve measurable tolerance limits
Explanation:
Conflicting objectives require sponsor-approved priorities and tolerances. This keeps trade-offs measurable and aligned with business value rather than allowing the team to choose implicitly.
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42A schedule contains activities A (4 days) and B (6 days), both starting immediately; C (3 days) follows A; D (5 days) follows A; E (4 days) follows both B and C; and F (2 days) follows both D and E. What are the project duration and critical path?
Project Schedule
Hard
A.11 days; A-D-F
B.13 days; A-C-E-F
C.12 days; B-E-F
D.15 days; A-C-D-F
Correct Answer: 13 days; A-C-E-F
Explanation:
The controlling branches reach F through A-C-E in days and then require 2 days for F. The resulting duration is 13 days, while the B-E-F and A-D-F paths are shorter.
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43At a status date, a task package has planned value , earned value , and actual cost , all in thousands. Which diagnosis is correct?
Managing the task
Hard
A.It is behind schedule and over budget, with and
B.It is ahead of schedule and over budget, with and
C.It is on schedule and over budget, with and
D.It is behind schedule and under budget, with and
Correct Answer: It is behind schedule and over budget, with and
Explanation:
indicates delay, while indicates cost inefficiency.
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44A six-month project is replanned monthly. In month three, several future work packages are decomposed in greater detail, but the approved scope and completion date remain unchanged. How should the plan be managed?
Managing the Plan
Hard
A.Replace the baseline because every increase in planning detail constitutes a change
B.Freeze all future work packages because decomposition invalidates performance measures
C.Record the decomposition as schedule variance against the original summary activities
D.Detail the near-term work through rolling-wave planning without resetting the baseline
Correct Answer: Detail the near-term work through rolling-wave planning without resetting the baseline
Explanation:
Progressive elaboration may add detail without changing approved commitments. The performance baseline should change only when an authorized scope, cost, or schedule change requires it.
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45Testing may start two days after coding starts, but deployment may start only after both coding and testing finish. Which precedence model represents these constraints most accurately?
Network Planning Model
Hard
A.Coding-to-testing Finish-to-Start with a 2-day lag; testing Start-to-Start into deployment
B.Coding-to-testing Start-to-Start with a 2-day lag; both activities Finish-to-Start into deployment
C.Coding-to-testing Finish-to-Finish with a 2-day lead; both activities Start-to-Start into deployment
D.Coding-to-testing Start-to-Finish with a 2-day lag; coding Finish-to-Finish into deployment
Correct Answer: Coding-to-testing Start-to-Start with a 2-day lag; both activities Finish-to-Start into deployment
Explanation:
Testing is constrained relative to the start of coding, so an SS relationship with a two-day lag is required. Deployment must wait for both predecessors to finish, requiring FS links.
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46A critical activity has normal duration 10 days at $20,000 and crash duration 6 days at $32,000. Another critical activity has normal duration 8 days at $18,000 and crash duration 6 days at $26,000. Assuming linear crash costs and unchanged criticality, what is the minimum direct cost of shortening the project by 5 days?
Time Dimension
Hard
A.$37,000
B.$38,000
C.$35,000
D.$36,000
Correct Answer: $35,000
Explanation:
The first activity costs per day and can save four days. The fifth day comes from the second activity at , giving for the two activities after crashing.
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47Two paths in a network have deterministic durations of 24 and 22 days. An activity on the 22-day path is delayed by 3 days, while an activity on the 24-day path is shortened by 1 day. Assuming no other interactions, what is the new critical-path situation?
Identifying Critical Path
Hard
A.Both paths become critical at 24 days
B.The former 22-day path becomes critical at 25 days
C.Neither path is critical because their floats changed
D.The former 24-day path remains critical at 23 days
Correct Answer: The former 22-day path becomes critical at 25 days
Explanation:
The paths become days and days. Criticality can migrate, so the formerly shorter path now determines project completion.
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48A customer requests a feature that would add business value but consume all schedule reserve. The team can technically implement it without exceeding the current target date. What should the project manager do first?
Managing Change
Hard
A.Reject the feature because schedule reserve cannot be used for requested changes
B.Ask the team to absorb the work without changing scope documentation
C.Submit the request for integrated impact analysis and formal change approval
D.Implement the feature because the published completion date remains achievable
Correct Answer: Submit the request for integrated impact analysis and formal change approval
Explanation:
Using reserve does not eliminate the scope change. Cost, quality, risk, benefits, and schedule resilience must be assessed through the authorized change-control process before implementation.
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49A mandatory regulation advances the compliance deadline by four weeks. Delivering every planned feature by that date is infeasible, but a compliant core product is feasible. Which adjustment is most defensible?
Readjusting Goals and Milestones
Hard
A.Retain the original feature scope and classify the regulatory date as an optional milestone
B.Move the compliance milestone while keeping the original goals unchanged for reporting consistency
C.Compress every activity equally so that no stakeholder's feature appears deprioritized
D.Make compliance the fixed milestone and defer lower-value features through approved reprioritization
Correct Answer: Make compliance the fixed milestone and defer lower-value features through approved reprioritization
Explanation:
A mandatory external deadline should become the governing constraint. Reprioritizing scope through approval preserves compliance and value while keeping the revised goals credible.
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50A supplier has already missed a contractual delivery date, and the resulting integration delay may cause a release-date breach. How should these conditions be classified?
Introduction to Risk
Hard
A.Both conditions are risks because neither has been fully resolved
B.The missed delivery is an issue; the possible release breach is a risk
C.Both conditions are issues because they involve the same causal chain
D.The missed delivery is a risk; the possible release breach is an issue
Correct Answer: The missed delivery is an issue; the possible release breach is a risk
Explanation:
An event that has occurred is an issue. Its uncertain future consequence remains a risk until the release breach either occurs or becomes impossible.
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51A project uses a mature framework, but a proposed data-protection law may require redesign, and the only privacy architect may resign. Which classification best distinguishes these two risks?
Categories of Risk
Hard
A.External regulatory risk and internal resource risk
B.External supplier risk and internal quality risk
C.Internal technical risk and external market risk
D.Internal governance risk and external financial risk
Correct Answer: External regulatory risk and internal resource risk
Explanation:
Legislative change originates outside the project and is regulatory. Loss of a key employee originates within the organization and is primarily a resource or organizational risk.
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52A project depends on an unstable third-party API. The team purchases a guaranteed service tier and also builds a local queue that allows 24 hours of disconnected operation. Which response strategies are being combined?
Dealing with Risk
Hard
A.Exploit and transfer
B.Transfer and mitigate
C.Avoid and accept
D.Accept and escalate
Correct Answer: Transfer and mitigate
Explanation:
The service guarantee transfers part of the financial or performance exposure to the provider. The local queue reduces the probability or impact of disruption, which is mitigation.
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53Which risk-register statement most clearly follows the cause-event-effect structure needed for actionable identification?
Risk Identification
Hard
A.Integration is high risk and should be monitored closely throughout development
B.Because the legacy API is undocumented, integration may fail, causing a four-week delay
D.The legacy API requires mitigation, contingency reserve, and senior management attention
Correct Answer: Because the legacy API is undocumented, integration may fail, causing a four-week delay
Explanation:
The statement distinguishes the present cause, uncertain event, and potential consequence. That structure supports ownership, assessment, triggers, and targeted responses.
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54Risk A has a 20% probability of a $100,000 loss. Risk B has a 50% probability of a $30,000 loss. They are mutually exclusive: if A occurs, B cannot occur. What is their combined expected monetary loss?
Risk Assessment
Hard
A.$26,000
B.$20,000
C.$35,000
D.$32,000
Correct Answer: $35,000
Explanation:
Expected monetary values are and . Mutual exclusivity affects the loss distribution, but the expectation remains additive, so the total is .
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55A database migration risk has a named owner and a mitigation action. If rehearsal throughput falls below 8,000 records per minute, the project will switch to a staged migration using reserved infrastructure. What does the throughput threshold represent?
Risk Planning
Hard
A.A trigger for executing the contingency response
B.A residual risk created by the mitigation response
C.A tolerance that automatically changes the project baseline
D.A workaround developed after the risk has materialized
Correct Answer: A trigger for executing the contingency response
Explanation:
The threshold is a predefined warning condition that activates the planned fallback. It is not itself a response, residual risk, or unplanned workaround.
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56Encryption is introduced to mitigate data-exposure risk, but it creates a new possibility that transaction latency will exceed the service target. How should the latency risk be managed?
Risk Management
Hard
A.Record it as residual exposure under the original data-exposure risk only
B.Exclude it because risks created by approved controls are accepted automatically
C.Record it as a secondary risk and assign assessment and response actions
D.Convert it directly into an issue because the encryption decision has been made
Correct Answer: Record it as a secondary risk and assign assessment and response actions
Explanation:
A secondary risk arises because of a response to another risk. It should be separately identified, assessed, owned, and monitored.
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57A Monte Carlo schedule analysis produces completion dates with August, September, and September. A contractual date of 2 September is proposed. Which interpretation is valid?
Evaluating Risk to the Schedule
Hard
A.The model estimates an 80% chance of completing by 2 September
B.The expected completion date must be exactly halfway between the percentiles
C.The project will finish between 18 August and 2 September with certainty
D.The model estimates a 20% chance of completing by 2 September
Correct Answer: The model estimates an 80% chance of completing by 2 September
Explanation:
is the date by which approximately 80% of simulated outcomes complete. It implies about a 20% modeled chance of finishing later, subject to model assumptions.
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58A critical activity has optimistic, most likely, and pessimistic estimates of 4, 7, and 16 days. Using PERT, what are its expected duration and variance?
Applying the PERT Technique
Hard
A.9 days and 4 days squared
B.8 days and 2 days squared
C.9 days and 2 days squared
D.8 days and 4 days squared
Correct Answer: 8 days and 4 days squared
Explanation:
PERT gives . The variance is days squared.
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59A project portfolio is evaluated using , where is expected benefit, is cost, is expected loss, and is capital at risk. Portfolio X has million, while Y has million. Which portfolio has the better RAPP?
Risk Adjusted Portfolio Performance (RAPP)
Hard
A.Portfolio X, because its RAPP is versus
B.Portfolio Y, because its RAPP is versus
C.Portfolio Y, because its RAPP is versus
D.Portfolio X, because its RAPP is versus
Correct Answer: Portfolio Y, because its RAPP is versus
Explanation:
For X, . For Y, , so Y produces greater risk-adjusted performance under the stated measure.
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60Two equally funded projects each have return variance . With equal portfolio weights, which choice produces the lowest portfolio variance?
Portfolio Optimisation and Diversification 2.0
Hard
A.Choose projects with covariance , giving variance
B.Choose projects with covariance , giving variance
C.Choose projects with covariance , giving variance
D.Choose projects with covariance , giving variance
Correct Answer: Choose projects with covariance , giving variance
Explanation:
For equal weights, . Negative covariance therefore gives the smallest variance: .
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