Risk Management and Decision Making Quiz

A fintech startup discovers a 70% probability of regulatory changes impacting its core payment processing system within 6 months. The CEO wants to avoid service disruptions. Which response best mitigates this risk?

• Allocate $2M to lobby against the regulation

• Develop a modular architecture allowing rapid compliance adaptations

• Purchase insurance covering regulatory penalties

• Hire a legal team to monitor legislative updates

Your team is building an AI medical diagnosis tool with a fixed FDA submission deadline. Scope creep from clinicians’ “must-have” feature requests threatens the timeline. What activity could have avoided this?

• Eliminate all non-core features

• Categorize features into Must-Have/Should-Have/Nice-to-Have with SME input

• Double the engineering team size

• Negotiate a deadline extension

A pharmaceutical company’s Phase III trial faces two risks: Risk X: 40% chance of 6-month delay ($50M loss) Risk Y: 15% chance of trial cancellation ($200M loss), which risk gets priority?

• Risk X (higher probability)

• Risk Y (higher severity)

• Both require equal attention

• Neither – quantitative analysis is needed

In the context of a merger, you find that Company A refers to their risk management tool as “Risk Diary” while Company B calls it “Risk Register.” As a PM for Company A, you should:

• Allow both teams to use their preferred terms

• Standardize the term to “Risk Register”

• Develop a new term that combines both

• Organize a vote among employees

A tropical storm has a 70% chance of hitting your conference venue. The project’s risk appetite is “low.” Which mitigation strategy best balances cost and reliability?

• Book a backup venue 10 miles away

• Buy weather insurance

• Email attendees about possible rescheduling

• Install storm-resistant infrastructure

Your blockchain project’s lead developer (with unique smart contract expertise) mentions job offers from competitors. Your first step should be:

• Match competitor salaries

• Conduct one-on-ones to address job satisfaction drivers

• Hire an understudy immediately

• Accelerate the project timeline

A risk matrix prioritizes:

• Risks with the highest financial impact

• Risks combining high probability and severe impact

• All risks equally

• Only legal/compliance risks

Your team identifies 47 risks during a construction project’s planning. To avoid analysis paralysis:

• Focus on top 5 risks using a probability/impact matrix

• Develop mitigation plans for all 47

• Hire external risk consultants

• Defer risk management until execution

A hospital’s risk register shows: Risk 1: 25% chance of ransomware attack (Impact: 100%) Risk 2: 80% chance of nurse strikes (Impact: 80%). Which risk has higher priority?

• Risk 1

• Risk 2

• Both are equal

• Can't be determined

During a post-mortem, your team realizes a key vendor risk was missed. To improve future identification, the first option could be:

• Include cross-functional stakeholders in risk brainstorming

• Increase risk management budget by 80%

• Require mandatory weekly risk reports

• Automate risk logging