Linda is the project manager of the NAB Project. One of the risks her project team has identified is too dangerous for the project team to manage internally so she has hired a vendor to complete…

The correct answer is A. Transference. Risk Transference is the correct answer. Transference is a risk response strategy where the financial impact of a risk (and often responsibility for managing it) is shifted to a third party, typically through contracts, insurance, warranties, or outsourcing. In this scenario…

Risk Strategy and Planning

Question

Linda is the project manager of the NAB Project. One of the risks her project team has identified is too dangerous for the project team to manage internally so she has hired a vendor to complete this portion of the project and to manage the identified risk. What risk response has Linda used in this instance?

Options

ATransference
BAvoidance
CContractual
DMitigation

How the community answered

(63 responses)

A
89% (56)
B
6% (4)
C
3% (2)
D
2% (1)

Explanation

Risk Transference is the correct answer. Transference is a risk response strategy where the financial impact of a risk (and often responsibility for managing it) is shifted to a third party, typically through contracts, insurance, warranties, or outsourcing. In this scenario, Linda hired a vendor to both complete the work and manage the associated risk - a classic example of transference. Importantly, transference does not eliminate the risk; it simply assigns ownership of the risk to another party. Avoidance (B) would mean eliminating the risk entirely by changing the project plan. Mitigation (D) would mean reducing the probability or impact of the risk. 'Contractual' (C) is not a standard PMI risk response strategy; while contracts are often the vehicle for transference, 'contractual' itself is not a named response type.

Topics

#Risk Response Strategies#Transference#Risk Planning

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