PMI-RMP · Question #409
A risk on the risk register is triggered. This triggered risk costs US$200,000 to mitigate and will overwhelm the project, causing it to fail if not mitigated. The project manager identifies that…
The correct answer is D. Management reserve. Management reserve is a budget set aside for unknown, unforeseen events that threaten project viability - events so significant they could cause project failure if unaddressed. In this scenario, the triggered risk will overwhelm the project and cause it to fail if not…
Question
A risk on the risk register is triggered. This triggered risk costs US$200,000 to mitigate and will overwhelm the project, causing it to fail if not mitigated. The project manager identifies that there is US$200,000 left in the management reserve. From which of the following sources should the funds be drawn to cover the risk mitigation?
Options
- AOrganization management reserve
- BUnplanned risk reserve
- CContingency reserve
- DManagement reserve
How the community answered
(32 responses)- A6% (2)
- B3% (1)
- C13% (4)
- D78% (25)
Explanation
Management reserve is a budget set aside for unknown, unforeseen events that threaten project viability - events so significant they could cause project failure if unaddressed. In this scenario, the triggered risk will overwhelm the project and cause it to fail if not mitigated, making it an extraordinary circumstance that justifies drawing from the management reserve. Option C (contingency reserve) is typically used for known-unknown risks (risks already on the register with planned responses), but when the contingency reserve is insufficient or the risk severity threatens the entire project, management reserve is the appropriate funding source. Option A (Organization management reserve) is essentially the same concept but less precise in project management terminology.
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