Module 4: Managing risks effectively

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In this post, I provide complete, accurate, and detailed explanations for the answers to Module 4: Managing risks effectively of Course 3: Project Planning: Putting It All Together Google Project Management: Professional Certificate.

Whether you’re preparing for quizzes or brushing up on your knowledge, these insights will help you master the concepts effectively. Let’s dive into the correct answers and detailed explanations for each question!

Test your knowledge: Risk management

Practice Assignment

1. Define a risk as it relates to project management.

  • A risk is an event that might occur and could impact a project in the future. ✅
  • A risk is a measurement that estimates the impact of known problems.
  • A risk is a known problem that has already impacted a project.
  • A risk is a measurement that estimates the potential impact of events that could occur in the future.

Explanation:
Risks are potential events that have not yet occurred but may affect the project positively or negatively if they do.

2. What is the difference between a risk and an issue in project management?

  • An issue is a known problem; a risk is an event that might happen in the future ✅
  • Risks and issues are both events that might happen in the future, but they could affect projects to different degrees.
  • Risks and issues are both known problems, but they affect projects to different degrees.
  • A risk is a known problem; an issue is an event that might happen in the future

Explanation:
Risks are potential future problems or opportunities, whereas issues are problems already happening that require immediate resolution.

3. Fill in the blank: Risk management is the process of _____.

  • identifying and initiating projects that have a low potential for risk
  • identifying and evaluating potential risks and issues that could impact a project ✅
  • identifying and avoiding projects that have a high potential for risk
  • identifying and mitigating risks and issues that are already impacting a project

Explanation:
Risk management involves identifying, analyzing, and preparing for possible risks to minimize their impact on project objectives.

4. Which of the following are true of risk management? Select all that apply.

  • It helps determine how to mitigate potential risks. ✅
  • It reveals what could go wrong with a project. ✅
  • It helps identify who a project manager should consult about a potential risk. ✅
  • It is a one-time exercise at the start of a project.

Explanation:

  • Risk management provides strategies to reduce potential risks.
  • It identifies possible problems before they occur.
  • Consulting relevant stakeholders ensures a comprehensive risk assessment.

Test your knowledge: Risk scenarios

Practice Quiz

5. Which three of the following scenarios represent possible opportunities that could arise from a risk?

  • Adding two team members from another team to increase productivity and meet the project deadline ✅
  • Hiring a new supplier of an item required to complete a product shortly before the project closes
  • Completing a milestone ahead of schedule ✅
  • Adopting a new spreadsheet software to streamline and simplify tasks in the future ✅

Explanation:
These scenarios highlight positive outcomes from risks, such as increased productivity, early completion of milestones, and process improvements. Hiring a new supplier shortly before a project closes is not an opportunity; it’s more likely a risk with potential negative consequences.

6. Which of the following scenarios is an example of a project issue? Select all that apply.

  • Clients do not return the necessary paperwork on time ✅
  • Materials increase in price ✅
  • Workers at a supplier’s production are currently in a labor strike ✅
  • Team members complete tasks early

Explanation:
Issues are problems that are currently occurring and affecting the project. The delay in paperwork, price increases, and labor strikes are active issues that require immediate attention. Completing tasks early is a positive development, not an issue.

7. Fill in the blank: The risk management process includes five steps: identify, analyze, evaluate, _____, and monitor and control.

  • accept
  • classify
  • treat ✅
  • mitigate

Explanation:
After evaluating the risks, the next step is to “treat” them, which involves creating and implementing action plans to address the identified risks.

8. During which phase of the risk management life cycle do you use the information you have gained about the likelihood and potential impact of risks to prioritize risks?

  • Monitor and control the risk.
  • Analyze the risk.
  • Evaluate the risk. ✅
  • Identify the risk.
  • Treat the risk.

Explanation:
In the evaluation phase, risks are prioritized based on their likelihood of occurrence and the potential impact on the project. This helps focus efforts on managing the most critical risks first.

Test your knowledge: Measuring risk impact

Practice Quiz

9. Which type of risk involves the possibility that a project will not produce the results outlined in the project goals?

  • Budget risk
  • Scope risk ✅
  • Time risk
  • Environmental risk

10. Imagine you’re a project manager overseeing the development and launch of a new app. Which of the following problems could be a single point of failure risk in the app’s development?

  • Completing a project milestone behind schedule, which may delay the project timeline.
  • Lack of communication between the designers and the project lead, which may lead to tension among team members.
  • Receiving negative feedback from user testing, which may lead to more work for the developers.
  • Failing to back up key project documentation, which may result in a complete loss of essential data. ✅

11. Continuing with the app-development project scenario from the previous question, which three of the following task relationships demonstrate an internal dependency?

  • Designers must complete wireframes before they begin prototyping. ✅
  • Researchers must conduct usability tests before the team can improve the design. ✅
  • Developers must fix bugs before the Quality Assurance team begins testing. ✅
  • Partner agencies must deliver image assets before the app is complete.
  • Clients must sign off on the design before the official launch.

12. Continuing with the app-development project scenario from the previous question, you need to secure funding to develop the app. You want to write a grant proposal to an investment firm. Which of the following is an external dependency for this task?

  • Appoint a team member to assemble the proposal.
  • Identify team members to write the sections of the proposal that align with their expertise.
  • Outline your project milestones in the proposal.
  • Get feedback from the investment firm about the types of projects they are interested in funding. ✅

Test your knowledge: Identifying and assessing risks

Practice Quiz

13. Imagine that you’re overseeing a project to construct a new office building for your company, and you need to determine your task dependencies. Which of the following tasks should come first?

  • Set the project budget.
  • Begin construction on the new building.
  • Identify the construction site.
  • Get stakeholder input to determine project goals. ✅

Explanation:
Dependencies involve tasks that rely on the completion of prior steps. The first step in any project is to determine the project goals, which guide all subsequent decisions, such as setting the budget, selecting the site, and planning construction. Stakeholder input ensures alignment on the project’s purpose and priorities, making it the logical starting point.

14. Continuing with the construction project scenario from the previous question, which of the following tasks should come last in the project?

  • Order the building materials.
  • Plan for risk.
  • Move equipment to the new office. ✅
  • Hire an architect.

Explanation:
Moving equipment is typically one of the final tasks, as it happens after the building is constructed and ready for use. Tasks like ordering materials or hiring an architect happen much earlier in the project timeline.

15. Continuing with the construction project scenario from the previous question, imagine that you underestimated the amount of a particular material needed to complete the new building. You purchase more of the material at full cost, since you no longer qualify for the bulk, discounted rate. What risk does this scenario demonstrate?

  • Environmental risk 
  • Budget risk ✅
  • Time risk
  • Legal risk

Explanation:
The scenario involves increased costs due to underestimating material needs, which directly impacts the project budget.

16. Continuing with the construction project scenario from the previous question, the project team completes the designs (Task A) and then begins construction (Task B). What type of dependency describes the relationship between Tasks A and B?

  • Finish-to-Start (FS) ✅
  • Start-to-Start (SS)
  • Start-to-Finish (SF)
  • Finish-to-Finish (FF)

Explanation:
A Finish-to-Start dependency means one task (Task A) must be completed before the next task (Task B) can begin. In this case, construction cannot start until the designs are finished.

Test your knowledge: Mitigating and communicating risks

Practice Quiz

17. Imagine you have learned that a contractor who has done quality work for your organization in the past has received some negative reviews recently. You choose to hire another contractor for the current project. This is an example of mitigating risk by ______.

  • accepting it
  • transferring it
  • avoiding it ✅
  • reducing or controlling it

Explanation:
Avoiding risk means taking steps to prevent the possibility of a negative event entirely, such as hiring a different contractor to eliminate the risk posed by the original contractor.

18. Which of the following are basic components of a risk management plan? Select all that apply.

  • A risk register ✅
  • Mitigation plans ✅
  • A Gantt chart
  • A probability and impact matrix ✅

Explanation:
These components are essential for identifying, analyzing, and responding to risks. A Gantt chart, while useful for scheduling, is not a specific risk management tool.

19. Which of the following tools can help project managers visualize how to mitigate a risk in order to reduce or control it?

  • A power grid
  • A decision tree ✅
  • A statement of work
  • A project charter

Explanation:
A decision tree provides a visual representation of possible actions, consequences, and outcomes, helping project managers choose the best mitigation strategy.

20. What step should you take after you complete your risk management plan?

  • Create a power grid to include in the appendix of your plan.
  • Estimate the likelihood and impact of the project risks you have prioritized.
  • Share the plan with your team and stakeholders. ✅
  • Implement the individual mitigation plans for the risks you have identified.

Explanation:
Once the plan is completed, sharing it ensures everyone is aware of the risks, mitigation strategies, and their roles in implementing the plan. Collaboration and communication are key to effective risk management.

Module 4 Challenge

Graded Quiz

21. Fill in the blank: A(n) _____ is a known and real problem that can affect a team’s ability to complete a task.

  • threat
  • drawback
  • issue ✅
  • risk

22. Failing to engage in risk management for your project can have which two of the following consequences?

  • You will not be able to meet project timelines and goals ✅
  • You will not be able to establish necessary vendor relationships
  • You will not be able to make necessary adjustments to the project plan ✅
  • You will not be able to use the appropriate tools

23. When working through the risk management life cycle, what’s the main goal when evaluating a risk?

  • Controlling risks
  • Identifying risks
  • Treating risks
  • Prioritizing risks ✅

Explanation:
The goal of evaluating risks is to prioritize them based on their likelihood and impact, ensuring the team focuses on addressing the most critical risks first.

24. Identify the steps involved in creating and utilizing a fishbone (or cause-and-effect) diagram.

  • Define the problem, identify risks, mitigate causes, and analyze the causes
  • Define the problem, identify categories, mitigate causes, and monitor feedback
  • Define the problem, identify risks, brainstorm causes, and monitor feedback
  • Define the problem, identify categories, brainstorm causes, and analyze the causes ✅

25. Choose the best definition for inherent risk as it relates to project management.

  • The measure of a risk, calculated by its difficulty and frequency
  • The measure of a risk, calculated by its timing and dependencies
  • The measure of a risk, calculated by its probability and impact ✅
  • The measure of a risk, calculated by its causes and circumstances

26. Which of the following are examples of external risk? Select all that apply.

  • A breakdown in communication among team members
  • A deliverable takes longer than anticipated to complete
  • A change in regulatory requirements ✅
  • A project vendor goes out of business ✅

27. Imagine that your company is considering using a vendor. The vendor makes quality products, but you have learned they have a reputation for shipping delays. Ultimately, you decide to use a different vendor. Which risk mitigation strategy did you use?

  • Accept the risk
  • Control the risk
  • Avoid the risk ✅
  • Reduce the risk

28. Which of the following is the best way to communicate a high-level risk to stakeholders?

  • Meet with stakeholders in person to present serious risks and your plans to mitigate them. ✅
  • Plan to present the risks and your mitigation plans at the next monthly meeting.
  • Describe the risks in a weekly planning email and briefly explain your plan to mitigate them.
  • Describe the risks and your mitigation plan to stakeholders the next time you see them in person.

29. As a project manager, you’re identifying task dependencies. Task B cannot finish until Task A is complete—the tasks operate at the same time. Which type of dependency does this situation represent?

  • Finish to Finish (FF) ✅
  • Start to Finish (SF)
  • Finish to Start (FS)
  • Start to Start (SS)

30. Which steps should be taken when updating a risk management plan? Select all that apply.

  • Add newly-identified risks. ✅
  • Remove risks that are no longer relevant. ✅
  • Move the plan to a confidential folder.
  • Include any changes in the mitigation plans. ✅

31. A project manager has a responsibility to identify and plan for potential problems and known issues. What is this process of identifying and planning called?

  • Risk identification
  • Risk mitigation
  • Risk management ✅
  • Risk analysis

Explanation:
Risk management involves identifying, analyzing, and planning for potential risks to minimize their impact on the project. It’s a proactive approach to ensure project success.

32. Risk management can help you avoid negative consequences like missing project timelines and goals. Which of the following is a benefit of effective risk management?

  • You will be able to use this project’s risk management plan again in different projects.
  • You will be able to establish necessary vendor relationships.
  • You will be able to make a flexible project plan that allows for necessary adjustments. ✅
  • You will have access to the appropriate tools for the project.

33. As a project manager you are practicing risk management. You have already defined potential risks, determined their likelihood, and prioritized them. Now, you’re making a plan to address and manage each risk. This represents which risk management step?

  • Monitor and control risks
  • Identify risks
  • Treat risks ✅
  • Analyze risks

34. Which of the following tools can project managers use to brainstorm the potential causes of risks?

  • Risk register
  • Project charter
  • Fishbone diagram ✅
  • Stakeholder map

35. A project manager identifies a series of tasks in an upcoming project that can only be started when the previous task has been completed. What term defines the relationship between these tasks?

  • Dependency ✅
  • Opposed
  • Stacked
  • Connected

Explanation:
A dependency defines the relationship between tasks, where one task’s initiation or completion relies on another, ensuring proper sequencing of activities in a project.

36. A project manager has just learned that a supplier has a history of missing deadlines. The supplier is defensive when asked about this. The project manager decides to find a new vendor. What kind of risk mitigation strategy is this?

  • Accepting risk
  • Transferring risk
  • Avoiding risk ✅
  • Controlling risk

37. A project manager communicates a newly discovered risk to a stakeholder. They include the risk in a weekly planning email with potential ways to address the risk if needed. What level of risk are they likely writing about?

  • High-level risk
  • Medium-level risk
  • Single point of failure
  • Low-level risk ✅

Explanation:
Low-level risks are minor and often included in routine updates to stakeholders, such as weekly emails, to maintain transparency without causing unnecessary concern.

38. A project manager has identified a number of tasks in an upcoming project with dependencies. Most of the dependencies are finish to finish. What situation is this dependency describing?

  • Task 2 cannot start until Task 1 has started
  • Task 2 cannot finish until Task 1 has finished ✅
  • Task 2 cannot finish until Task 1 has started
  • Task 2 cannot start until Task 1 has finished

39. A project manager writes a risk management plan. Currently they are working on an introduction to the conditions of the project and an outline of the potential risks. What is the name of this section in the risk management plan?

  • Executive summary ✅
  • Header
  • Appendix
  • Risk register

40. A project manager needs to identify and plan for known problems that can affect project completion. What are these known problems called in project management?

  • Potentials
  • Impactors
  • Risks
  • Issues ✅

41. As a project manager practicing risk management, you find and define potential project risks. Which risk management step does this represent?

  • Identify risks ✅
  • Monitor and control risks
  • Avoid risks
  • Treat risks

42. A project manager has just identified a risk that has the potential to be catastrophic and halt work across a project. What is this type of risk known as?

  • External risk
  • Single point of failure ✅
  • Complete halting point
  • Time risk

43. A project manager has just learned that a supplier is currently running low on required materials for a project. The supplier is very confident that the materials will be restocked before they are needed for the project. The project manager decides to continue with the vendor rather than finding a new one. What kind of risk mitigation strategy is this?

  • Accepting risk ✅
  • Controlling risk
  • Avoiding risk
  • Transferring risk

44. Which of the following is a recommended method to communicate a medium-level risk to stakeholders?

  • Call an urgent in-person meeting with stakeholders to present the risk and your plan to mitigate it.
  • Present the risk and your mitigation plan during the team meeting next month.
  • In the weekly planning email, briefly describe the risk and your plan to mitigate it.
  • Send stakeholders a direct email that outlines the risk and includes a detailed explanation of your mitigation plan. ✅

45. A project manager has identified a number of tasks in an upcoming project with dependencies. Most of the dependencies are start to finish. What situation is this dependency describing?

  • Task 2 cannot start until Task 1 has finished risks
  • Task 2 cannot start until Task 1 has started
  • Task 2 cannot finish until Task 1 has started v
  • Task 2 cannot finish until Task 1 has finished

46. The risk management process can provide project managers a better understanding of what information? Select all that apply.

  • When exactly the risk will occur
  • Who the project manager needs to consult about a risk ✅
  • How could the project manager mitigate the potential risk ✅
  • What could go wrong with the project ✅

Explanation:
The risk management process provides clarity on potential issues, the stakeholders to involve, and mitigation strategies, enabling project managers to plan effectively and handle uncertainties.

47. As a project manager practicing risk management, you’ve already identified the risk. Now, you’re determining the likelihood and potential impact the risk will have on your project. Which risk management step does this represent?

  • Avoid risks
  • Analyze risks ✅
  • Monitor and control risks
  • Treat risks

48. A project manager attempts to determine the root cause of a problem that has already occurred. Which tool below can help them?

  • Fishbone diagram ✅
  • Stakeholder map
  • Risk register
  • Project charter

Explanation:
A fishbone diagram helps identify the root causes of a problem by visually mapping out potential sources, enabling project managers to address the underlying issue effectively.

49. What is scope creep in project management?

  • The unexpected risks that can come together and form into a single issue that affect the scope of a project near completion
  • The changes, growth, and uncontrolled factors that affect the project’s scope at any point after the project begins ✅
  • The additional time a project takes to complete due to unforeseen setbacks
  • The amount of time that a project will take to complete as setbacks begin to arise

50. Which of the following risk types most commonly impact projects? Select all that apply.

  • Inherent risks
  • Budget risks ✅
  • Time risks ✅
  • Scope risks ✅

51. A project manager is concerned about the workload an internal team is taking on for an upcoming project. The project manager decides to shift this workload to an external supplier. What kind of risk mitigation strategy is this?

  • Transferring risk ✅
  • Accepting risk
  • Avoiding risk
  • Controlling risk

52. Should a risk management plan be updated regularly?

  • Yes; the plan is a living document and should include new findings ✅
  • Maybe; if the stakeholders specifically request the updates
  • No; the plan should be determined as early as possible

Explanation:
A risk management plan must be updated regularly to reflect new or evolving risks, ensuring it remains relevant and effective throughout the project lifecycle.

53. A project manager needs to identify and plan for potential events that can impact the project. What are these potential events called in project management?

  • Risks ✅
  • Delays
  • Problems
  • Issues

54. A project manager completes a fishbone diagram. They completed three steps: define the problem, identify categories, and brainstorm causes. What is the next step they should take to complete the fishbone diagram?

  • Mitigate the causes
  • Analyze the causes ✅
  • Identify risks
  • Monitor feedback

55. What does a risk management plan typically contain? Select all that apply.

  • Probability estimates for each risk ✅
  • A mitigation plan for each risk ✅
  • An executive summary ✅
  • A competitor analysis for each risk

Explanation:
A risk management plan typically includes mitigation plans to reduce risk impact and probability estimates to assess how likely a risk is to occur, ensuring preparedness.

56. Why should project managers communicate risks clearly to stakeholders? Select all that apply.

  • To increase trust in the relationship ✅
  • To get them to provide additional teammates, if necessary ✅
  • To convince them to provide an increase in budget, if necessary ✅
  • To deflect blame on project issues, if necessary

57. Fill in the blank: The process of identifying and evaluating potential risks and issues that could impact a project is known as _____.

  • risk management ✅
  • risk analysis
  • risk mitigation
  • risk identification

58. Which of the following are steps involved in creating and utilizing a fishbone (or cause-and-effect) diagram? Select all that apply.

  • Mitigate causes
  • Define the problem ✅
  • Identify categories ✅
  • Analyze the causes ✅

59. What two factors combine to determine inherent risk?

  • Damage and mitigation
  • Damage and impact
  • Probability and mitigation
  • Probability and impact ✅

60. As a project manager, you’re identifying task dependencies. Task B cannot finish until Task A has started. Which type of dependency does this situation represent?

  • Finish to Start (FS)
  • Start to Start (SS) ✅
  • Finish to Finish (FF)
  • Start to Finish (SF) 

Explanation:
Start-to-Start dependencies occur when one task (Task B) can only begin after another task (Task A) has started, ensuring proper project workflow and synchronization.

61. Which of the following best describes the risk register in the risk management plan?

  • An introduction to the conditions of the project and an outline of the potential risks
  • A description of each risk, its risk rating, and a mitigation plan ✅
  • The measure of a risk calculated by its probability and impact.
  • A list of general information such as the plan’s status, creation date, and uploaded date

62. Fill in the blank: A potential event that can impact your project if it occurs is called a(n) _____.

  • delay
  • issue
  • risk ✅
  • problem

63. A major part of risk management is identifying potential problems. Which of the following is another critical aspect of risk management?

  • Running practice situations where risks have become issues
  • Encouraging risk early in a project
  • Creating a plan for potential risks ✅
  • Reviewing past projects and reusing those risk management plans

64. You are identifying risks for an upcoming project. You have already planned for time risks and budget risks. Which of the following is another common type of risk?

  • Scope risk ✅
  • Creeping risk
  • Limiting risk
  • Impact risk

65. Fill in the blank: Once an organization has explored the inherent risks of a project, its willingness to accept the possible outcomes of those risks is known as _____.

  • risk analysis
  • risk appetite ✅
  • risk register
  • risk assumption

66. Which of the following are examples of external risk? Select all that apply.

  • A breakdown in communication among team members
  • A change in regulatory requirements ✅
  • A project vendor goes out of business ✅
  • A deliverable takes longer than anticipated to complete

67. Which of the following best describes the risk register in the risk management plan?

  • The measure of a risk calculated by its probability and impact.
  • An introduction to the conditions of the project and an outline of the potential risks
  • A description of each risk, its risk rating, and a mitigation plan ✅
  • A list of general information such as the plan’s status, creation date, and uploaded date

68. A project manager and a project sponsor are discussing their different risk appetites. What is risk appetite?

  • A desire to incur extra risks
  • A willingness to accept the possible outcomes of a risk ✅
  • The shifting of some risks to a different team
  • The assumption of additional risks for added challenge

69. What are the most common types of risk that can impact projects?

  • Time risks, budget risks, and external risks
  • Budget risks, scope risks, and internal risks
  • Budget risks, internal risks, and external risks
  • Time risks, budget risks, and scope risks ✅

70. A project manager communicates a newly discovered risk to a stakeholder. The project manager sends a direct email to stakeholders and includes “urgent” in the subject line. What level of risk are they likely writing about?

  • Low-level risk
  • Single point of failure risk
  • High-level risk
  • Medium-level risk ✅

71. A project manager writes a risk management plan. Currently, they are working on a description of each risk, its risk rating, and a mitigation plan. What is the name of this section in the risk management plan?

  • Risk register ✅
  • Appendix
  • Header
  • Executive summary

72. Which of the following is a tool used to assess and prioritize project risks?

  • Probability and impact matrix  
  • Fishbone diagram
  • Cause-and-effect diagram
  • Power grid

Explanation:
This matrix evaluates risks based on their likelihood and potential impact, helping project managers prioritize and focus on the most significant risks.

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