CAPM Exam Prep Practice Test with Answers, Exams of Marketing Business-to-business (B2B)

Download CAPM Exam Prep Practice Test with Answers and more Exams Marketing Business-to-business (B2B) in PDF only on Docsity! 1 CAPM® Exam Prep Practice Test with Answers 2024 1. The process of establishing clear and achievable objectives, measuring their achievement, and adjusting performance in accordance with the results of the measurement is called: Strategic Planning Contingency Planning Detailed planning Management by Objectives Explanation: Correct Answer is D. In management by objectives, the employee and supervisor meet to discuss the objectives of the employee over the next review period. At the end of the review period the performance of the employee is reviewed relative to the objectives, and adjustments are made. 2. During the full life cycle of the project, a plot of the project's expected expenditures will usually follow a characteristic S curve. This indicates that: There is a cyclic nature to all projects. Problems will always occur in the execution phase 2 Explanation: There are high expenditures during closeout The bulk of the project budget will be spent in the execution phase s Chat Query? Correct Answer is D. Most of the project money will be spent during the execution phase. At the beginning of execution the rate of expenditures rises as people and materials are brought into the project. Later the expenditures peak and slow down. By the end of the execution phase expenditures are approaching a minimum. 3. In which project lifecycle phase would you expect to have the greatest influence on overall project cost? Concept Design Build Launch Explanation: Correct Answer is A. All the stated options represent a life cycle phase; Concept is the phase which is the earliest phase in the project and therefore the phase where influence is greatest. 4. Requirement is - Quantified and documented needs of stakeholders Quantified and documented expectations of customer Quantified and documented expectations of sponsor All of the above Explanation: Correct Answer is D. All of the statements state requirement. It can be quantified and documented needs of stakeholders / customers / sponsor etc. 5 6 CMMi 9. What is the name of PMI's Organization maturity model for project management? Call Us Chat Query? Six Sigma OPM3 JIT Explanation: Correct Answer is C. OPM3 was published by the Project Management Institute Incorporated (PMI). It provides a method for organizations to understand their Organizational Project Management processes and measure their capabilities in preparation for improvement. 10. Which of the following is NOT a characteristic of a Project? It has a definite beginning and end It produces a unique deliverable It is temporary It is managed in strict accordance with the PMBOK guidelines Explanation: Correct Answer is D. All the stated are characteristics of project stated in the Project definition, viz. Project is a temporary endeavor undertaken to create a unique product, service or result. 11. A group of related projects that are managed in a coordinated way that usually includes an element of ongoing activity is called a: Major project Project office Program Group of projects Explanation: Correct Answer is C. Program is a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. 7 12. Project constraint could be on - 10 Historical data Existing human resources Project management information system Call Us Chat Query? Explanation: Correct Answer is D. Of the options listed, Historical data is organizational process assets and not defined as Enterprise environmental factors. 16. A person who is involved in or may be affected by the activities or anyone who has something to gain or lose by the activity of the project is called a: Team member Customer Stakeholder Supporter Explanation: Correct Answer is C. A stakeholder is an individual or an organization that is involved in or may be affected by project activities. 17. Large projects may be divided into smaller, more manageable components known as, checklists decomposition scope breakdown structures subprojects Explanation: Correct Answer is D. Large projects may be divided into more manageable components known as subprojects. 11 18. A manager who manages a group of related projects is called a - Project manager Project expeditor Program coordinator Program manager 12 Explanation: Correct Answer is D. A Program Manager is a manager that manages a group of related projects in a coordinated way. Call Us Chat Query? 19. Which of the following activity is conducted last as part of closing process group Validating deliverables Archival of the document Lesson learnt documentation Customer satisfaction survey Explanation: Correct Answer is D. Measuring customer satisfaction survey is the last activity under closing 20. In the PMBOK, each process is broken into - Inputs and Outputs Tools and techniques Best Practices and Recommended users A and B Explanation: Correct Answer is D. In the PMBOK, each process is broken into Inputs, Outputs and Tools and Techniques. 21. A stakeholder has the greatest ability to influence a project during - Monitoring and Controlling Initiation and Planning Closing Executing Explanation: Correct Answer is B. Though the stakeholders have influence over the project process groups, the greatest influence is during the Initiation and Planning process groups. 15 25. The Change Management Plan should be included in which of the following? Project Management Plan 16 Quality management plan Communications management plan Configuration management plan Call Us Chat Query? Explanation: Correct Answer is A. The Change Management Plan is a document or procedure found in the project management plan and is used for the 'Control Scope' process. 26. Who is a Project Initiator? A member of your team A member of quality management team A project manager A person or organization that has the ability and authority to start the project Explanation: Correct Answer is D. Project Initiator is a person who has initiated the project, i.e. he has the ability and authority to start the project. 27. Who does the Project Integration? Project Sponsor Project Manager Project Team Stakeholder Explanation: Correct Answer is B. This is pretty simple and straight forward question. 17 28. Which of the following is true about Project Plan ? Project Plan needs to have the buy in of the entire project team Project Plan is created and approved by the Project Manager Project Plan is prepared by the Sponsor and given to the Project Manager to execute Project plan is prepared only when all the required resources come on board 20 32. The project is characterized by frequent changes to the project charter. Authorizing project charter changes should typically be the responsibility of Call Us Chat Query? Senior management Project Manager Project management team Project stakeholders Explanation: Correct Answer is A. Projects are authorized by someone external to the project and someone who is higher in the hierarchy such as sponsor, senior management, PMO or portfolio steering committee. In the options listed, only option A suggests a person who is senior in hierarchy, that is the correct answer. 33. Which of the following defines a Defect repair? Documented direction for executing the project work to bring expected future performance of the project work in line with the project management plan Documented direction to perform an activity that can reduce the probability of negative consequences associated with project risks The formally documented identification of a defect in a project component with a recommendation to either repair the defect or completely replace the component Documented direction to perform an activity that can expand the probability of negative consequences associated with project risks Explanation: Correct Answer is C. Defect repair is the formally documented identification of a defect in a project component with a recommendation to either repair the defect or completely replace the component. 34. Facilitating a change to the project schedule involves each of the following, except, replacing the original schedule baseline analyzing the impact of the change preparing a formal change request, in accordance with the project change control system formally obtaining the appropriate approval Explanation: Correct Answer is A. A change to the project schedule does not indicate replacing the schedule baseline. It means analyzing the impact and following the change control process. 21 22 The project charter is developed during closing Query? The project charter is developed during initiation The project charter is developed during planning The project charter is developed during execution Explanation: Correct Answer is B. Project charter is developed during initiation process group. 36. A budget change is requested and approved during the execution/control phase of the project. What is your MOST appropriate action following approval? Integrate the changes as approved, then create a new cost baseline Create a new cost baseline, but only after changes have been made Notify your project sponsor Integrate budget changes but maintain the original cost baseline Explanation: Correct Answer is D. The most appropriate action following approval is to integrate budget changes and to maintain the original cost baseline. 37. Which is NOT an output from the 'Direct and Manage Project Execution' process? Deliverables Work Performance information Project management plan Project document updates Explanation: Correct Answer is C. Project management plan is an input to this process while the others stated are outputs from this process. 35. Which of the following is true? Call Us Chat 25 41. Any numbering system that is used to monitor project costs by category such as labor, supplies, or materials, for example, is called: Chart of Accounts Work Breakdown Structure Universal standard Standard accounting policy 26 Explanation: Correct Answer is A. The chart of accounts is the system used to monitor project costs as defined by PMI. Call Us Chat Query? 42. An example of 'Validate Scope' process is : Reviewing the performance of an installed software module Managing changes to the project schedule Decomposing the WBS to a work package level Performing a benefit-cost analysis to determine if we should proceed Explanation: Correct Answer is A. Validating scope is the process of verifying that the project made or delivered what was asked for. 43. A project manager is creating a work breakdown structure for her project. In the breakdown structure, the lowest level of the breakdown for the project manager is called the: Activity Task Work Package Cost account Explanation: Correct Answer is C. In the work breakdown structure the lowest level of breakdown is the work package. A wok package can be scheduled, cost estimated, monitored and controlled. 27 44. A project manager is reviewing the scope of the project and the scope baseline of the project. Which of the following does it include? The original project schedule, budget, and scope The original project description and the project charter The original scope of the project plus or minus any scope changes The current project budget Explanation: Correct Answer is C. The current project baseline for scope includes the original scope of the project plus or minus any scope changes that have taken place since the baseline for scope was established. 30 Project scope order to deliver a product with the specified features and functions is: Chat Query? Project verification Project control Product scope Explanation: Correct Answer is A. Project Scope is the work that needs to be accomplished to deliver a product, service or result with the specified features and functions. Product scope is the features and functions that characterize a product, service or result. 49. Which of the following is NOT a tool and technique for the 'Define Scope' process? Product analysis Alternatives Identification Facilitated workshop Decomposition Explanation: Correct Answer is D. Of the options listed, Decomposition is a tool and technique for the 'Create WBS' process. All the other options are tools and techniques for the 'Define Scope' process. 50. Which of the following are the Requirement workshops that are focused sessions that bring key cross functional stakeholders together to define product requirements? Facilitated workshops Cross Functional workshops Focus groups Group workshops Explanation: Correct Answer is A. Facilitated workshops are Requirement workshops that are focused sessions that bring key cross functional stakeholders together to define product requirements. 48. The work that must be done in Call Us 31 32 Unanimity 51. The method of reaching a group decision where the largest block in a group decides even if a majority is not achieved is known as : Call Us Chat Query? Plurality Majority Dictatorship Explanation: Correct Answer is B. Plurality is the group decision making technique where the largest block in a group decides even if a majority is not achieved. 52. "Job Shadowing", an observation technique that is usually done externally by the observer viewing the user perform his or her job, is a tool and technique for - Create WBS Control Scope Collect Requirements Verify Scope Explanation: Correct Answer is C. "Job Shadowing", an observation technique that is usually done externally by the observer viewing the user performing his or her job, is a tool and technique for the 'Collect Requirements' process. 53. Which of the following may NOT be included in the Project Scope Statement? Project exclusions Project deliverables Project assumptions Product verification criteria Explanation: Correct Answer is D. Product verification criteria is not included in the Project Scope Statement. 35 57. You are the project manager of a project that is in its early phase. You need to estimate the duration of implementing the project. Based on your experience with similar past projects, you estimate a 6-month implementation time. What is this type of estimation technique called? Three Point estimating Bottom up Estimating PERT 36 Correct Answer is D. Analogous Estimating project as the basis for estimating the same uses parameters such as duration, budget, size, we parameter or measure for a future project. Since t ght and complexity from a previous similar he question specifically states that based on Analogous Estimating Explanation: Call Us Chat i Query? the experience gained from similar past projects, hence the estimation technique is Analogous. 58. An activity has an Early start(ES) of day 5, a Late Start (LS) of day 15, an Early Finish (EF) of day 8 and Late Finish(LF) of day 18. This activity : Is on the critical path Has a lag Is progressing well Is not on the critical path Explanation: Correct Answer is D. The said activity has a float, LS - ES = 15-5=10 or LF-EF=18-8=10. Hence this activity is not on the critical path as activities on the critical path do not have a positive float. 59. The difference between actual time and planned time is known as, Variance Performance quota BAC Baseline reserve Explanation: Correct Answer is A. Variance is the difference between actual time and planned time. 37 60. If a project has 5 days of project float and 10 days of total float, what will happen if the early start date is delayed 3 days, how will this impact the project completion date: The project end date will be pushed out 5 days The project end date will be pushed out 10 days The finish date won't change The project will be able to finish early 40 64. A task was scheduled to use t wo persons, full time, and take two wee ks to complete. Instead, the Call Us Chat Query? Correct Answer is C. Resource leveling is a tool in most project management software and can also be done manually. In resource leveling an attempt is made to reduce overutilization of resources to their normal utilization. project manager was only able to assign one person to this task. At the end of two weeks, the person assigned to the task was 75% complete. What is the cost performance index? 0.5 1.5 1.1 0.7 Explanation: Correct Answer is B. At the end of two weeks this task is 75% complete. The PV was to be 4 person-weeks, two people working full time for two weeks. The EV is therefore 3 person-weeks, .75 x 4. The AC is 2 person-weeks. The cost performance index (CPI) is the EV / AC. i.e., CPI = 3 person-weeks / 2 person-weeks 1.5. 65. Which of the following is considered to be a simulation technique? PERT Analysis GERT Analysis Monte Carlo analysis Critical path method Explanation: Correct Answer is C. Monte Carlo analysis is a simulation technique that assigns durations to tasks in a schedule and then calculates the schedule information. 41 66. In the first attempt in resource leveling the project schedule, what would you expect to occur? The number of required resources will increase during certain time periods of the project The number of required resources will decrease during certain time periods of the project The overall project duration will increase The overall project duration will DECREASE Explanation: Correct Answer is C. Resource leveling, because of the limited availability of the resources, often results in a project duration that is longer than the preliminary schedule. 42 lot of variability. The project mana completion date? ger should use which method to more accurately predict the project 67. A project manager would like to manage his project in such a way that he will be able to predict the duration of the project more accurately, even though the estimates for the duration of the activities have a Call Us Chat Query? CPM GERT PERT Activity Sampling Explanation: Correct Answer is C. PERT stands for program evaluation and review technique. In PERT, each of the activities has the optimistic, pessimistic, and most likely duration estimated. The weighted average is calculated by adding the optimistic, pessimistic and four times the most likely duration and dividing by 6. 68. The project manager will use the PERT method of scheduling for the project that she is working on. Using the PERT calculation, the variance for the project is found to be 25 days and the duration of the project is found to be 169 days. What is the range of values for the project duration such that there will be at least a 95% probability that the actual project completion will fall between the high and low value of the range of values? 164 - 173 days 144 - 194 days 119 - 219 days 159 - 179 days Explanation: Correct Answer is D. In the PERT calculation, the standard deviation is calculated by squaring the standard deviation for each of the activities on the critical path of the project, adding them together and then taking the square root. This is the standard deviation of the project. Plus or minus two standard deviations from the expected value of the project duration will have a range of values such that the project has a 95% probability of actually finishing within the dates calculated. 45 72. Which is the output from the 'Estimate Activity Resources'? Resource breakdown structure Alternatives data Project management software Resource calendars Explanation: Correct Answer is A. Of all the options listed, Resource Breakdown structure is the output from this process. 46 73. For a project with the following data, evaluate the project's burn rate : PV = $750,000, EV = $750,000 and AC = $900,000 Call Us Chat Query? 1.2 1 0.1 0.83 Explanation: Correct Answer is A. Burn Rate = 1/CPI = AC / EV = 900,000 / 750,000 = 1.2 74. Post-mortem analysis after scheduled finish date of a project shows a CPI of 0.8 and an SPI of 1.25. What is a plausible explanation for that? The project was terminated early. At that time, it was over budget and ahead of schedule The project has produced additional deliverables which were originally not required The project has evidently been finished under budget and behind of schedule The project has evidently been finished over budget and ahead of schedule Explanation: Correct Answer is A. The key to the answer is what happens to SV and SPI when your project is finished. Assuming "finished" means you completed all your planned work (PV) and deliverables. If so, then your Earned value (EV) would be equal to your Planned value (PV), and SV would be zero and SPI would be 1.0. In this question since SPI is not 1.0 then you have not "finished" the project. This eliminates answers C and D, and since there is no way to determine if additional scope was added, answer B is eliminated. That leaves answer A as the only choice. 75. Which of the following about Budgets is not true, Budgets need not be approved Budget is an approved estimate for the project Budget is an approved estimate for any work or schedule activity Budget at completion is the total planned value for the project Explanation: Correct Answer is A. Estimated costs of individual activities or work packages is aggregated to establish an authorized cost baseline. It is essential to get the project budgets approved. All the options listed barring option A are correct. 47 50 Price should be considered as a lifecycl e costing factor, whereas cost should not be Price includes all direct costs, whereas cost includes all indirect project costs Price and cost are not the same Call Us Chat Query? Explanation: Correct Answer is C. Of the listed options, option A is false. Option B and D appear misleading. Option C broadly states the difference. 80. Which of the following is the cost estimate technique that involves developing detailed estimates at the work package level of the WBS, thereafter rolling them up to derive the project's total cost? Analogous estimating Parametric estimating Bottom - up estimating Probabilistic estimating Explanation: Correct Answer is C. Bottom up estimating generally produces the most confident estimates, but is more costly and time consuming than analogous estimating. Bottom up estimating is performed by developing detailed estimates for each activity at the work package level of the WBS. 81. Which of the following statements is MOST true regarding Cost Baselines? Cost baselines are typically illustrated using graphs. Plotted cost baselines usually form an S curve appearance. Cost baselines are typically documented informally as they are likely to change frequently. Cost baselines are typically documented as a subsidiary plan to the overall project plan Cost baselines are typically illustrated using Gantt Charts or Milestone Charts Explanation: Correct Answer is A. Option B is false as cost baseline should not be subject to frequent changes. Option C describes the cost management plan more accurately than the cost baseline. Option D more accurately describes the project schedule and not the cost baseline. Hence, Option A is correct. 51 82. Tools and Techniques for 'Control Costs' process includes all of the following except - Variance analysis Performance reviews Forecasting 52 Correct Answer is A. Of the listed options, V ariance Analysis is a tool and technique used for th e 'Control Scope' process. Reserve Analysis Explanation: Call Us Chat Query? 83. A project was estimated to cost $1.5M and scheduled to last 6 months. After three months, the earned value analysis shows the following - EV = $650,000, PV = $750,000, AC = $800,000. What is the Schedule Variance? "-$100,000" "+$100,000" "-$50,000" "+$50,000" Explanation: Correct Answer is A. Schedule Variance, SV = EV - PV = 650,000 - 750,000 = -100,000. 84. To distinguish top down estimates from bottom up estimates, it would be correct to say that the bottom up estimate would be: Less accurate Both have about the same accuracy More accurate No different to perform than the top down estimate Explanation: Correct Answer is C. Bottom up estimating generally produces the most confident estimates, but is more costly and time consuming than analogous estimating. Bottom up estimating is performed by developing detailed estimates for each activity at the work package level of the WBS. 55 88. You have discovered a problem and are trying to determine the cause. The process whereby you identify the variables that have the most influence on the project by holding all the variables constant and changing one at a time is called: Product correlation Design of experiment System configuration Output processing 56 Explanation: Correct Answer is B. Design of experiment is a statistical method for identifying which factors may influence specific variables of a product or process under development or in production. Call Us Chat Query? 89. The totality of characteristics of an entity that bear on its ability to satisfy stated or implied needs is the definition for: Modern quality management Quality assurance Quality Quality control Explanation: Correct Answer is C. Stated and implied needs are the inputs to developing the requirements of the product or output from the project. 90. One of the fundamental tenets of quality management is that quality: Must exceed customer expectations Is planned in and not inspected in Will increase cost Costs must all be passed onto the customer Explanation: Correct Answer is B. Quality must be planned into the product, not inspected in. The design and building of the product should be such that the quality will be designed or built in rather than expecting the inspection of the product to catch the mistakes and defects and rework them into a quality product. 57 91. A category or rank given to products that have the same functional use but different technical characteristics is called the product's: Quality Functional characteristics Grade Technical characteristics Explanation: 60 Should be created only for large compl ex projects 95. A responsibility assignment matrix Call Us Chat Query? Shows assignment and levels of authority and does not indicate time Shows when people will be brought into the project and when they will leave Maybe used to show reporting relationships Explanation: Correct Answer is B. RAM is used to illustrate the connections between work packages or activities and project team members. 96. Herzberg divided motivation factors into two classes: satisfiers and dissatisfiers. Examples of satisfiers are: Vacation time, assignment of a personal staff assistant Work satisfaction, fringe benefits Plush office space, performance based salary raise Sense of personal achievement, work satisfaction Explanation: Correct Answer is D. Projects must often have their own reward and recognition systems since the systems of the performing organization may be not appropriate. 97. The skill of listening involves more than just hearing the sounds. One of the characteristics of a good listener is that he or she: Finishes the speaker's sentences Takes good notes Repeats some of the things said Agrees with the speaker Explanation: Correct Answer is C. Good listening is an important skill for any manager. 61 62 Accommodating 98. Which conflict resolution technique should be used when the deadline is critical and tasks are at risk of slipping? Call Us Chat Query? Forcing Problem Solving Compromising Explanation: Correct Answer is B. The scenario clearly warrants action on war-footing basis and therefore, the best method to resolve conflict is forcing. 99. You are a team member for the project to develop the Human Resource Management system that looks into Recruitment, Attendance, Leave Management, Appraisal and Employee Exit. The project has been assigned a budget of $3 Million that is not flexible. This is an example of, Assumption Expert Judgment Constraint Estimation Explanation: Correct Answer is C. Constraint is an applicable restriction or limitation, either internal or external to a project, which will affect the performance of a project or process. Here, the question mentions that the project has a constraint budget of $3 Million. 65 104. Which of the following is NOT an input to the 'Develop Human Resource Plan'? Enterprise environmental factors Organizational process assets 66 Explanation: Activity resource requirements Expert Judgment Call Us Chat Query? Correct Answer is D. Expert Judgment is not an input to the said process. 105. Which of the following is TRUE about Progress Reports, a report that informs the stakeholders about the progress of the project? They allow stakeholders to judge the performance of the project according to its plan They are generally considered to be overkill on very small projects They require the use of earned value reports They must be produced by the project manager Explanation: Correct Answer is A. Progress reports should be used even on the smallest of projects. They allow all of the stakeholders to judge the performance and progress of the project according to the project plan. 106. The three principal interests in maintaining good document control are: Timely communication, collection of performance appraisal data, and assuring proper disposal of sensitive documents Timely communication, maintaining proper approvals and communication cost control Effective communication, ability to reconstruct why decisions were made and historical value Security, change management and procedural documentation Explanation: Correct Answer is C. The project manager has three main reasons for or interests in having good document control: effective communications, making sure that all necessary information is distributed and received by all those who need it; be able to reconstruct why certain decisions were made and the conditions under which they were made; historical value, so that lessons learned can be used in the future on other projects. 67 107. Your project manager wants to handle communications well in his project. In order to do this he has chosen to write a communications plan. Of the items listed below, which one is not part of the communications plan? Collection and filing structure Distribution plan Method for accessing information 70 111. When you want to report on th e actual project results vs. planned res ults, you use? Call Us Chat Query? Correct Answer is A. Formal written communication with customer is required in procurement, especially where the contract is involved. Since Option A talks about contract, hence it is the answer. Trend report Forecasting report Status report Variance report Explanation: Correct Answer is D. The keyword here is "compare". The only report that compares project results is Variance report. 112. The Power /interest grid groups the stakeholders based on - Level of authority (power) and their level of concern (interest) . Level of authority (power) and their active involvement (influence) Active involvement (influence) and ability to effect changes to project's planning or execution (impact) power, urgency and legitimacy Explanation: Correct Answer is A. The Power / Interest Grid groups the stakeholders based on their level of authority (power) and their level of concern (interest) regarding the project outcomes. 113. Which of the following is NOT an input to the 'Plan Communications' process? Stakeholder register Communications technology Stakeholder management strategy Enterprise environmental factors Explanation: Correct Answer is B. Of the options listed, Communication technology is the tool and technique for the 'Plan Communications' process. All the other options are inputs to the said process. 71 72 28 114. You are attending the status meeting along with 7 other project team members and the project manager. How many communication channels are available in the status meeting? Call Us Chat Query? 36 21 20 Explanation: Correct Answer is B. There are a total of 9 people involved : 7 team members, Project Manager and your self. Using the formula for potential communication channels, viz. n(n-1)/2, the communication channels available are 36. 115. Which of the following statement is NOT true about Risks? Risks cannot be identified and have to be dealt with as they occur Risk Identification is the process of identifying which risks might affect the project Risk Response Planning is the process of developing options and actions to enhance opportunities and to reduce threats to project objectives A risk or threat can be transferred to a third party Explanation: Correct Answer is A. Risks can be identified during the project lifecycle and strategies to deal with them can also be created as part of Risk Response Planning during the Planning process group. 116. Two vendors offer to sell similar electronic components, which are integrated at the vendor's site. To avoid risk while evaluating the bids, the project manager views such items as the vendors'? Price, sales volume, profit margin Price, promised delivery, inspection schedule Price, experience, delivery means Experience, personnel skills, material control procedures Explanation: Correct Answer is 'C'. Price, experience and delivery are the basis on which the project manager should select a vendor to bring down the risk associated with the project. 75 76 It determines the risk to public only 120. Sensitivity analysis is one of the tools involved in performing quantitative risk analysis. What are the advantages of using sensitivity analysis? Call Us Chat Query? It allows for independent answers Management understands that there is a range of possible outcomes It provides insight into the project that the PM may be lacking Explanation: Correct Answer is 'C'. Sensitivity analysis allows the project team to understand the effect of each variable in the project, and allows management to see that there is a range of possible outcomes. 121. A project of $1.5 million has an adverse event that has the probability of 60% of occurrence and a potential loss of $25,000. This represents an expected negative value of: $1,50,000 15000 1500 90000 Explanation: Explanation :(b) $15,000. Correct Answer is 'B'.Expected value= Probability x Outcome =0.6 x -25,000 = -15,000 122. After reviewing the detailed analysis of a risk associated with a particular project activity, your Project Manager along with the team decides to respond to the risk by purchasing insurance. This could be an example of? Active acceptance Passive acceptance Mitigation Transference Explanation: Correct Answer is 'D'. Transference is a risk response strategy where the risk is transferred to a third party. 77 80 Risks that are assessed with scores in t he lower left portion of a typical P-I matrix indicate low probability with low impact Risks that are assessed with scores in the lower left portion of a typical P-I matrix indicate high probability with high impact Risks that are assessed with scores in the upper right portion of a typical P-I matrix indicate low probability with low impact Risks that are assessed with scores in the upper right portion of a typical P-I matrix indicate high probability with low impact Explanation: Correct Answer is A. Risks that are assessed with scores in the lower left portion of a typical P-I matrix indicate low probability with low impact. Risks that are assessed with scores in the upper right portion of a typical P-I matrix indicate high probability with high impact. Middle areas indicate high-low or low-high scores. 127. Tools and Techniques for Quantitative Risk Analysis are all of the following EXCEPT, Expert Judgment Data gathering and representation techniques Quantitative risk analysis and modeling techniques Risk Register Explanation: Correct Answer is D. Risk Register is not a tool and technique but an input to this process 128. The recycling project manager has determined that the risks associated with handling certain hazardous chemicals are too high. He has decided to allow an outside company that specializes in handling hazardous materials to complete this portion of the project, and so has outsourced the handling of the chemicals to an experienced contractor. Which of the following is it an example of? Transference Mitigation Avoidance None of the above Explanation: Correct Answer is A. Risk Transfer requires shifting some or all of the negative impact of a threat, along with ownership of the response to a third party. Transferring the risk does not eliminate it. 126. Which of the following statements is MOST true? Call Us Chat Query? 81 82 Analysis of: strengths, weakness, optio ns, and timing 129. As part of risk identification, you are tasked with using a technique called SWOT. Which of the following describes SWOT? Call Us Chat Query? An elite project team that comes in and fixes project risks and threats Analysis of strengths, weakness, opportunities, and threats Technique for rating risks on a scale from 1 to 100 Explanation: Correct Answer is C. SWOT is the analysis of strengths, weakness, opportunities and threats. 130. As part of planning, you are identifying risks and impacts of risk on your project. Chris, a project team member, is confused by what risk means. Your explanation is that a risk is a (an) occurrence of event that can affect the project for good or bad.: Uncertain Potential Planned None of the above Explanation: Correct Answer is A. Risk is an uncertain occurrence of event that can affect the project for good or bad. 131. Which is not an example of a correctly handled Contract closure procedure? Early termination of a contract due to bad reputation and poor delivery Settling and finally closing the contract agreement Product verification by stakeholders and administrative closure Early termination of a contract because of an immaterial breach Explanation: Correct Answer is D. All the stated options are examples of a correctly handled contract closure whereas early termination due to immaterial breach is not acceptable 85 134. The Project Management Head intends to hand over an infrastructure project to Tom, the project manager. But within the senior management of the organization, there are varied views about this project; some senior management people in the organization are against taking up the project because they feel that it is better to buy the same product from an outside source while, others feel that building the product in-house is a better option. Which of the following tools will help Tom decide whether the product should be purchased or developed in-house? Make-or-Buy Analysis Fishbone model Ishikawa diagram ROI Analysis Explanation: Correct Answer is 'A'. Make-or-Buy analysis is a general management technique used to determine whether particular work can best be accomplished by the project team or must be purchased from outside sources. 86 there is no risk Call Us 135. The primary advantage of a fixed price contract with the vendor is: Chat Query? cost risk is higher cost risk is lower risk is shared by all parties Explanation: Correct Answer is 'C'. Fixed price contracts are awarded when you are well aware of the product. Option A is incorrect because no contract can completely eliminate all risks. Option B is incorrect as cost risk is lower, not higher. 136. Which type of contract would your Project Manager NOT want to use when he does not have enough staff in the financial department to audit invoices, Fixed Price Cost plus fixed fee Time and Material Fixed price incentive fee Explanation: Correct Answer is 'B'. The Cost plus Fixed Fee contract needs the most auditing as the risk is highest at the buyer's end and also because of the size and the cost involved in these types of contracts. 137. Your colleague, Shelly has recently been promoted as the Project Manager for an Infrastructure project. She is in the process of procurement of material for his project. Since you have been involved in procurement activities with your project manager, Shelly needs assistance in identifying the contract type where the seller's profit is limited? Cost-plus-percentage-cost contract Cost-plus-fixed-fee contract Firm Fixed price contract Fixed-price-incentive fee contract Explanation: Correct Answer is 'B'. Since we are talking about limited seller's profit, Option b clearly specifies fixed fee which indicates that the profit of the seller is fixed in this type of contract and has been decided with the buyer in confidence. Though Option c also appears to be the answer, in Firm fixed contract, the buyer has no information about the seller's profit as the seller quotes a single value for the contract. 87 Contract 138. Legal contractual agreements between two or more entities to form a partnership or joint venture , or some other agreement between the parties is known as, Call Us Chat Query? Teaming Agreements Requirements contract Procurement contract Explanation: Correct Answer is B. Teaming agreements are legal contractual agreements between two or more entities to form a partnership or joint venture , or some other arrangement between the parties. The agreement defines buyer-seller roles for each party. 139. Which is NOT an output from the 'Plan Procurements' process? Procurement statement of work Procurement management plan Procurement decisions Source Selection criteria Explanation: Correct Answer is C. Procurement decisions is not an Output from the said process. 140. Which of the following is a tool and technique for the 'Control Procurements'? Records management system Advertising Expert Judgment Resource calendars Explanation: Correct Answer is A. Of the options listed, Records management system is the only tool and technique for 'Administer Procurements' process. 90 144. Which of the following is a tool to assess the current and desired state of engagement of a stakeholder on the project? Stakeholder registers Stakeholder management plan Stakeholder engagement assessment matrix 91 Answer: C - Stakeholder engagement assess tool to assess the engagement levels of the ment matrix, which is a tool and technique of the stakeholders on a project. Plan stakeholder management process, is a Stakeholder issue log Explanation: 145. What is the best way to manage stakeholders which are low on power and interest? Monitor them No need to worry about them Treat all stakeholders equal Keep them informed Explanation: Answer: A - The strategy for stakeholders who are low on the power-interest grid is 'Monitor'. 146. Which of the following should you be most concerned about, during stakeholder analysis? Their interest in the project Their influence on the project Both A and B Neither A nor B Explanation: Answer: C - The stakeholder can be interested in a project or be in a position to influence the project. As such, both are important for the project to understand. 92 147. Stakeholder management involves all of the following EXCEPT: Identifying the stakeholders Keeping all stakeholders happy Analyzing stakeholder expectations Managing stakeholder engagement Explanation: Answer: B - Stakeholder management involves processes required to identify stakeholders, analyze their expectations and to develop appropriate strategies to engage them. It does not necessarily mean keeping everybody happy (which may not even be possible).