PMI-RMP Question #505: Real Exam Question with Answer & Explanation

Question

A project has a significant impact on an organization. Multiple stakeholders expressed concerns regarding the overall project risk during construction of the risk management plan, and they agreed that the risk appetite is low. What should the project risk manager monitor closely?

Options

• ARisk thresholds
• BRisk response strategies
• CRisk management reports
• DRisk breakdown structure (RBS)

Explanation

The project risk manager should monitor risk thresholds closely, as they represent the organization's risk appetite. In a project with a low risk appetite, it is essential to ensure that risks are managed within the defined thresholds to address stakeholders' concerns and maintain their confidence in the project's success. Risk thresholds are the measure of acceptable variation around an objective that reflects the risk appetite of the organization. Risk appetite is the degree of uncertainty an entity is willing to take on in anticipation of a reward. In this case, the project has a significant impact on the organization and the stakeholders have a low risk appetite, meaning they are not willing to accept much deviation from the project objectives. Therefore, the project risk manager should monitor the risk thresholds closely to ensure that the project risks do not exceed the acceptable level of variation and impact the project performance negatively. By monitoring the risk thresholds, the project risk manager can also identify when risk responses are needed and evaluate their effectiveness.

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