Question 01:
You have been supplying engines to an auto-production company. During an inspection at the client’s facility, a few of your engines failed testing. Therefore, they send you those engines for replacement. What kind of cost of quality is this?
A. Internal
B. External
C. Variable
D. Damaged
Answer: B
Since this fault was caught when you have delivered the product to the client, it will be known as an external cost.
Question 02:
You are using an analytic tool to find the strengths and weaknesses of alternatives to determine the best option in terms of benefits provided. What tool is this?
A. SWOT analysis
B. Prototype
C. Benchmarking
D. Cost-benefit analysis
Answer: D
You are doing a cost-benefit analysis here.
Question 03:
An identified risk occurred during the execution phase and the risk owner implemented the risk response plan. The impact of the risk was higher than the planned impact and the risk response plan was not effective. So, you ask the risk owner to implement the fallback plan to contain the situation. To implement the fallback plan, which reserve is most likely to be utilized?
A. Contingency reserve
B. Management reserve
C. Cost reserve
D. Cost savings
Answer: A
You develop the fallback plan for identified risks for which the primary risk response strategy fails or for the accepted risks; therefore, in most cases, you will use the contingency reserve for a fallback plan.
Question 04:
You need to hire several subject matter experts for your project. Time is limited and the scope of work is also not very clear. In this situation what kind of procurement contract will you utilize to hire experts?
A. Cost plus fixed fee
B. Firm fixed price
C. Fixed price economic price adjustment
D. Time and material
Answer: D
If you have to hire an expert where the scope of work is not clear, the time and material contract is the best option.
Question 05:
Your project is 60% complete and while reviewing the lessons learned document you notice that it has missed a few lessons you have learned recently. You call all your team members and tell them to update the lessons learned as they happen. On any project, who is responsible for updating the lessons learned?
A. Project manager
B. Project management team
C. Quality control personnel
D. Quality assurance personnel
Answer: B
It is the responsibility of the whole project management team, including the project manager, to update the lessons learned.
Question 06:
Management wants to track the project cost and you want to provide them with this information with the use of a chart. Which of the following charts can be used for this purpose?
A. Project scope statement
B. RBS
C. Network diagram
D. OBS
Answer: D
A resource breakdown structure can be aligned with the accounting system to track down the project cost.
Question 07:
You are in the process of subdividing project deliverables and project work into smaller, more manageable parts so the project management team can get a structured vision of what has to be delivered. Which of the following is an output of this process?
A. Project scope statement
B. RBS
C. Network diagram
D. OBS
Answer: A
You are in the Create WBS process. The scope baseline is an output of the Create WBS process, which consists of the project scope statement, the WBS, and the WBS dictionary
Question 08:
An activity can be completed in 5 days if the conditions are favorable; however, if the conditions are unfavorable, it will take 10 days to complete. The most likely time for this activity to be completed in 6 days. Determine the PERT estimate for this activity.
A. 6.5
B. 7
C. 5
D. 3.5
Answer: A
In the given question:
Optimistic Estimate (to) = 5 days
Pessimistic Estimate (tp) = 10 days
Most Likely Estimate ™ = 6 days
PERT Estimate = (to + 4tm + tp) / 6
= (10 + 4 * 6 + 5) / 6
= (10 + 24 + 5) / 6
= 39 / 6
= 6.5
Therefore, the PERT estimate for this activity is 6.5 days.
Question 09:
What is the standard deviation for the above activity?
A. 0.833
B. 2
C. 1/3
D. 0.5
Answer: A
Standard Deviation = (tp – to) / 6
= (10 – 5) / 6
= 5 / 6
= 0.833
Therefore, the standard deviation for this activity is 0.833
Question 10:
You are reviewing a chart that looks like an S-Curve during the execution phase of your project. What kind of chart is this?
A. Cause and effect diagram
B. Pareto diagram
C. Sensitivity diagram
D. Cost baseline
Answer: D
This is a cost baseline curve that looks like an S-Curve.
Question 11:
A team member tells you that if he adds a few extra lines of code to the program, it will add some more functionality to the program and the client will appreciate the product. You ask him to refrain from doing so. What the team member was going to do is known as:
A. Gold plating
B. Fast tracking
C. Scope creep
D. Crashing
Answer: A
This is an example of gold plating where you add extra functions (which are not mentioned in the product scope) to make a client happy.
Question 12:
You are going to launch a new product in the market and to attract customers you sign an advertisement contract with a famous Hollywood actor. What kind of power are you using here to market your product?
A. Formal power
B. Referent power
C. Expert power
D. Influential power
Answer: B
Hollywood actors are famous and they can influence the decisions of their fans. Therefore, here you are using referent power to influence the buyers.
Question 13:
The probability and impact matrix helps you rank risks so you can develop your risk management plan accordingly. Which statement is true about the probability and impact matrix?
A. It includes high-grade risks with its impact
B. It includes low-grade risks with its impact
C. Here the definition of probability and impact is decided
D. A grid showing probability and impact of the risk
Answer: D
In the probability and impact matrix, you can see the probability of each risk and its impact on the project objective.
Question 14:
You have signed a multi-year contract with a customer to complete a project for a fixed price. Since the duration of the contract is long, you have added a provision to adjust the price of the contract according to the market inflation. What kind of contract is this?
A. FPIF
B. FP-EPA
C. Time and Material
D. CPIF
Answer: B
If you sign a fixed price multi-year contract with the customer, you add a special clause that helps you adjust the price of the contract according to inflation. This contract type is known as a fixed price with economic price adjustment (FP-EPA).
Question 15:
Your organization has an opportunity to select one project from many available projects. Therefore, they ask you to select a project based on the constrained optimization selection method. Which of the following techniques will you use to select the project?
A. NPV
B. IRR
C. Linear programming
D. Payback period
Answer: C
NPV, IRR, and payback period are examples of the benefits measurement method. Linear programming is an example of the constrained optimization project selection method.
Question 16:
Enterprise environmental factors are conditions under which you must work and you cannot control them. Which of the following is not an enterprise environmental factor?
A. Organization culture
B. Market condition
C. Corporate knowledge base
D. Project management information system
Answer: C
The corporate knowledge base is a part of organizational process assets.
Question 17:
Your organization gets a new project and wants you to assign the project manager for this project. As management is busy with other activities, they ask you to develop the project charter so the project can get started. To develop the project charter, which of the following is not needed?
A. Strategic plan
B. Business case
C. Agreements
D. Project plan
Answer: D
The project plan is developed once the project charter is signed.
Question 18:
The client has given you a project to construct a cold storage plant. Everything was going as planned, however, due to some unforeseen incidents, your project is delayed. The client is in a hurry and has threatened you with a large penalty if you are not able to complete the project on time. So, you started working hard to complete the project and avoid the fine. You are working overtime, bringing in more resources from other projects, and renting extra equipment; finally, you complete the project on time. This is an example of:
A. Critical chain
B. Fast tracking
C. Crashing
D. Resource leveling
Answer: C
Here, you have brought some extra resources to bring the project on track, so this is an example of crashing.
Question 19:
Due to an improper cost management plan, you are over budget, and a new estimate is required to complete the project. Management asks you what the new estimate for the project will be. Which of the following formulas is not used to find this new estimate?
A. BAC / CPI
B. AC + (BAC – PV)
C. AC + (BAC – EV)
D. AC + (BAC – EV) / (CPI * SPI)
Answer: B
Management is asking you to calculate the estimate at completion (EAC). All options except EAC = AC + (BAC – PV) are correct formulas to calculate the EAC in different scenarios.
Question 20:
Management wants to get your organization accredited by ISO for its quality management system. Therefore, they call some external auditors to come and review your processes for ISO QMS compliance. Which ISO standard is used for a quality management system?
A. ISO 9001
B. ISO 9000
C. ISO 31000
D. ISO 1800
Answer: A
ISO 9001 is the Quality Management – Requirement, ISO 9000 is Quality management systems – Fundamentals and vocabulary, ISO 31000 is Risk management – Principles and guidelines, and ISO 18000 is Information technology – Radio frequency identification for item management.
Question 21:
You are working in a large organization and directly reporting to the project manager. Whenever you give any report to the project manager, he asks for supporting evidence and documents. He also routinely watches all his team members’ minute activities. What kind of boss is he?
A. Theory Y
B. Theory X
C. Theory Z
D. Hygiene theory
Answer: B
Your boss monitors your activities and does not trust you. This means he is micromanaging you, which is an example of Theory X.
Question 22:
You are behind schedule and the client has threatened you with a penalty if you fail to complete the project on time. Therefore, you fast-track many activities to finish the project earlier. Unfortunately, an important team member has become ill and left the job. You did not plan for this incident; however, you manage to get a replacement from a
manpower supply company and the risk is mitigated, although you have to pay him more salary. From where will you deduct this extra amount?
A. Contingency reserve
B. Project cost
C. Management reserve
D. Project budget
Answer: C
If any unidentified risk occurs, you will use the management reserve to manage it
Question 23:
The project statement of work is a narrative description of products, services, or results to be delivered by a project. The procurement statement of work includes:
A. Project scope statement
B. WBS dictionary
C. WBS
D. Procurement statement
Answer: D
The procurement statement of work includes the scope of work that is included in a particular contract.
Question 24:
Your project is 70% complete and within the next two months it will be 100% complete and the deliverable will be handed over to the client. Afterward, you will be assigned to a new project. You have your staff but they are worried about their jobs. What type of organizational structure is this?
A. Projectized organization
B. Matrix organization
C. Balanced matrix organization
D. Weak matrix organization
Answer: A
In a projectized organization, team members always live in fear of losing their job. They know that once the project is completed and the organization does not have any new projects, they may lose their jobs.
Question 25:
You have joined a new organization and are assigned a project. This is a new type of project but the organization has completed many similar projects in the past. You decide to review the lessons learned from past projects. You go to the archives and ask for the lessons learned from past projects. Lessons learned is a part of which of the following?
A. Organizational process assets
B. Enterprise environment factor
C. Project management plan
D. Project archive
Answer: A
Lessons learned are a part of organizational process assets.
Question 26:
The client informs you that he noticed some parts of the work are not being completed by your team. You ensure him you will look into it and give a proper response after verifying the facts. Which document will you refer to verify it?
A. Scope statement
B. WBS dictionary
C. Schedule baseline
D. WBS
Answer: A
In the project scope statement, you can find all the detailed information about the project’s work.
Question 27:
Your project is delayed and you are trying to compress the schedule so that you can bring your project on track. While reviewing the activities of your project, you notice that plumbing work starts after completing electrical work. You discuss these two activities with your team members and reach a conclusion that these two activities can start at the
same time. Therefore, you make a change to the plan to start these two activities together. Which technique are you using here?
A. Resource leveling
B. Resource optimization
C. Crashing
D. WBS
Answer: C
Since you are performing two activities in parallel to save time, this is an example of fast-tracking.
Question 28:
You are developing a video game for a client. The cost of the project is 250,000 USD. To date, you have spent 100,000 USD and you have completed the 30% of the project. Upon a review of the project, you find that, due to an error, you are over budget and from now onward you can move ahead as planned. What is the EAC of the project?
A. 425,000 USD
B. 357,142 USD
C. 225,000 USD
D. 275,000 USD
Answer: D
The cost overrun is due to an error and you are sure that the remaining work can be completed as you have planned. In this scenario, you will use the following formula to calculate the EAC:
EAC = AC + BAC – EV
Given in the question:
AC = 100,000 USD
EV = 30% of 250,000
= 0.3 * 250,000
= 75,000 USD
BAC = 250,000 USD
Therefore, EAC = 100,000 + 250,000 – 75,000
= 275,000 USD
Question 29:
You have delivered a batch of spare parts to a client. The client performed an inspection of these items and found that they do not meet their quality requirements. The client is not satisfied and they have returned the items to you which requires a lot of rework. What will happen if you do not meet the quality requirements of the product?
A. More profit
B. Less rework
C. Stakeholder satisfaction
D. More after-sale support
Answer: D
If you are not meeting the quality requirements of the product, this means the product is of low quality and you may be required to provide more after-sale support. In the given question, you are reworking, however, this is not the general case.
Question 30:
Two of your team members are having conflicts about their roles and responsibilities. In attempting to resolve this conflict you ask them to refer to the responsibility assignment matrix. Which of the following statements is not true about the responsibility assignment matrix?
A. It shows the individual responsibilities for each activity
B. It helps you rank risks
C. RACI is an example of RAM
D. It shows resources assigned to each work package
Answer: B
The responsibility assignment matrix connects work packages to the project resources. It is not used for ranking of risks.
Question 31:
You see an opportunity if you complete the project ahead of time: you may get a new project. Therefore, you try to complete the project early, but due to lack of resources, you are only able to shorten the duration of a few activities by starting the parallel or partially parallel. Which risk response strategy are you employing here?
A. Exploit
B. Mitigate
C. Enhance
D. Accept
Answer: C
Here, you are applying the enhanced risk response strategy because you are only trying to realize the opportunity. In the exploit risk response strategy, you make sure that the risk is realized. Mitigate is a negative risk response strategy, and in accept you do not take any proactive action.
Question 32:
You have advertised in several newspapers to inform interested contractors to apply for a bid for some of your procurement needs. Which process are you currently in?
A. Plan procurement management
B. Conduct procurement
C. Control procurement
D. Accept procurement
Answer: B
Advertisement is a tool and technique of the conduct procurement process.
Question 33:
You have been given four possible projects and must select one project to work on. The NPV of each project is: 10,000 USD, 15,000 USD, 20,000 USD, and 25,000 USD. Which of the following projects will you select?
A. The project with 10,000 USD NPV
B. The project with 15,000 USD NPV
C. The project with 20,000 USD NPV
D. The project with 25,000 USD NPV
Answer: D
You will always select the project with the highest NPV.
Question 34:
You are developing a smartphone when suddenly your competitor has launched a smartphone that is better than yours. Therefore, you make some changes to the product which causes WBS elements to be amended heavily. What kind of changes have you made to your project?
A. Change in scope
B. Change in schedule
C. Change in quality
D. Change in risk
Answer: A
The project scope consists of scope baseline, WBS, and WBS dictionary. Therefore, any change in the WBS will be reflected in the scope.
Question 35:
In procurement management, you have many documents to help you such as a request for quotation, request for information and invitation for bid, etc. These documents are knowns as:
A. Organizational process assets
B. Project documents
C. Contract documents
D. Procurements documents
Answer: D
All these documents are referred to as procurement documents.
Question 36:
Management is asking you to provide them with a report on the project’s status and progress. Therefore, you start preparing a report on it. You are preparing a chart where you are using a virtual activity (an aggregation of several activities) showing the summary levels so management can understand it easily. This virtual activity is known
as:
A. Milestone
B. Control activity
C. Hammock activity
D. WBS activity
Answer: C
Hammock activities are a summary of many activities which are roughly related to each other. Hammock activities are also referred to as summary activities.
Question 37:
You want to buy a cell phone and you have two options. The first phone is cheaper and offers less functionality, but it has a proven track record of good stability and reliability. The second phone is a feature-rich, costly phone but it has some stability and reliability issues. Which of the following statements is correct about these phones?
A. The first cell phone is a low grade, high-quality phone
B. The second cell phone is a low grade, high-quality phone
C. The first cell phone is a high grade, low-quality phone
D. The second cell phone is a high grade, high-quality phone
Answer: A
Since the first phone meets its stated requirements, you would say that this is a high-quality product. Less functionality means a lower grade.
Question 38:
You have joined a new project which is having a lot of conflicts. Management has asked you to analyze the causes of these conflicts and provide suggestions to reduce them as they are affecting the project performance. Which of the following is least likely to be a cause of conflict in a project?
A.Ground rules
B. Clarity in roles and responsibilities
C. High salary
D. Proper communication
Answer: C
Salary is a hygienic condition. It does not help in reducing conflicts.
Question 39:
You have identified risks and now have asked your team members to analyze which risks have the largest potential impact on the project. Which of the following tools will help you find this impact?
A. Sensitivity analysis
B. Pareto analysis
C. Probability and impact analysis
D. Decision tree method
Answer: A
Sensitivity analysis helps you find which risk has the most potent impact on the project objectives. One example of sensitivity analysis is a “Tornado Diagram”
Question 40:
You have two projects with NPV 10,000 USD and 15,000 USD. Since the NPV of the second project is higher, you will select it. In this case, the cost of 10,000 USD will be known as:
A. Sunk cost
B. Opportunity cost
C. Lost cost
D. Schedule cost
Answer: B
Since you have not selected the project with NPV of 10,000 USD, this will be your opportunity cost.
Question 41:
You are managing two projects. The first project is to design a simulator for a client which he will use in his driving school. The second project is to install a security system on a client’s premises to ensure its security around the clock. What is your role here?
A. Project manager
B. Portfolio manager
C. Program manager
D. Project coordinator
Answer: B
You are managing two different kinds of projects, so your role is a portfolio manager
Question 42:
Due to improper cost planning, your cost performance is not as planned and you are over budget. Therefore, you again estimate the cost of the project and find that you will require more money to complete the project. This will require an update of the cost baseline. What will you do?
A. Update the cost baseline
B. Raise the change request to update the cost baseline
C. Update the cost baseline and inform management
D. Depends on the constraint
Answer: B
If there is a change that requires an update to the cost baseline, you will raise it, get it approved, and then update the cost baseline.
Question 43:
Assumptions and constraints are important for your project. They help shape your project management plan. Any wrong assumptions or constraints can severely impact your project. How will your project be affected when a constraint turns out to be false?
A. Positively
B. Negatively
C. Depends on the constraint
D. In the middle
Answer: A
If any constraints turn out to be false, your project may be affected positively because constraints are limitations imposed on your project.
Question 44:
You have a project with a budget of 100,000 USD. The duration of the project is 20 months, and the work is evenly distributed throughout the duration. After 10 months, you review the project’s progress and you find that 55% of the work is completed and 65,000 USD has been spent. Based on the above information, you come to the conclusion that:
A. The project is behind schedule
B. The project is ahead of schedule
C. The project is under budget
D. Not enough information
Answer: B
SPI=EV / PV
EV= (100,000 * 0.55)
= 55,000
PV = 100,000 * 0.5
= 50,000
Therefore, SPI =55.000 / 50,000
= 1.1
Since the SPI is more than one, you are ahead of schedule.
Question 45:
For question number 344, determine the estimate at completion assuming the future cost performance is the same as the past cost performance.
A. 110,000 USD
B. 85,000 USD
C. 909,09 USD
D. 117,647 USD
Answer: C
We know that, CPI = EV / AC
So, first we will calculate the EV then we will divide it by the AC.
EV =10000 * 0.55
= 55,000
AC = 65,000
CPI = 55,000 / 65,000
=0.85
Now, EAC= BAC / CPI
= 100,000 / 0.85
= 117,647 USD
Question 46:
You have been producing rods with the following lengths: 50 cm, 55 cm, 62 cm, 65 cm, and 68 cm. What is the standard deviation?
A. 35
B. 43.6
C. 6.6
D. 4
Answer: C
Mean = (50 + 55 + 62 + 65 + 68) / 5
= 60
And, Variance = (50 – 60)2 + (55 – 60)2 + (62 – 60)2 + (65 – 60)2 + (68 – 60)2
= (100 + 25 + 4 + 25 + 64) / 5
= 43.6
We know that Standard Deviation = square root of Variance
Therefore, Standard Deviation = square root of 43.6
= 6.6
Question 47:
You are working as a project manager in a functional organization. You have limited power and no team member reports to you directly. In this situation, which power will you use to get the job done?
A. Reward power
B. Expert power
C. Referent power
D. Formal power
Answer: A
Since you are working in a functional organization you do not have formal power. Expert power and referent power do not help much for getting the job done. However, you can use reward power to get the job done. Reward power does not need to be monetary, it can be recognition or a preferred job assignment, etc.
Question 48:
During risk planning, you encounter a risk that you find difficult to manage; therefore, you make small changes to your project management plan to eliminate the risk. Which risk response strategy are you using here?
A. Avoid
B. Mitigate
C. Accept
D. Exploit
Answer: A
Here, you are using the avoid risk response strategy to manage the risk. In this strategy, you eliminate the threat by changing the project management plan.
Question 49:
To create the status report, you have collected the data for the value of completed work, actual duration, the actual percentage of completed work, etc. These data are examples of:
A. Work performance data
B. Work performance information
C. Work performance measurement
D. Performance data
Answer: A
Completed work, actual duration, and actual percentage of completed work are examples of work performance data.
Question 50:
The client needs a small modification in the project scope, and he discusses it with you. He has told you that this may not increase the cost and may actually save some money. What will your next step be?
A. Approve it
B. Reject it
C. Review it
D. Discuss it with the management
Answer: C
Every change request should be reviewed thoroughly. Once you review the change request you will be able to determine if this may cause you to spend more money or save it.
Question 51:
You are using a technique involving the project’s risk and uncertainty to find the probability of completing the project under different situations. What process is this?
A. Estimate activity duration
B. Perform qualitative risk analysis
C. Develop schedule
D. Perform quantitative risk analysis
Answer: C
You are using a Monte Carlo simulation to find the chance of completing the project within the scheduled time. You are in the development schedule process.
Question 52:
You are constructing an office building. The cost of this project is 200,000 USD, and the duration of the project is 8 months. During the performance review in the sixth month, you find that 65% of the work is completed and the cost performance index is 1.3. The Planned Value (PV) will be:
A. 150,000 USD
B. 130,000 USD
C. 70,000 USD
D. 266,666 USD
Answer: A
Since no details are available on the schedule, you can safely assume that the work is evenly distributed each month.
In this case, the planned value will be = (200,000 / 8) * 6= 150,000 USD
Question 53:
You have been assigned a very critical project. Although your team members are experts and efficient, your team performance is poor. What will you do to improve your team performance?
A. Train them
B. Warn them
C. Co-locate them
D. Punish them for poor performance
Answer: C
Since the team members are experienced and experts, the only option left to increase the performance is to co-locate them.
Question 54:
You have been given a task to find cost estimates for several projects, and your organization will submit its bid based on these estimates. The financial position of the organization is not very good; therefore, they tell you that they cannot invest more than 500,000 USD. They also give you a leeway of 10% on either side of it. This leeway is a part of:
A. Organizational process assets
B. Enterprise environmental factors
C. Threats
D. Opportunities
Answer: B
This 10% limit is the stakeholder tolerance, which is an enterprise environmental factor.
Question 55:
You are developing a product for your client. During the development of the product, the client has indicated that he needs some changes in the product, so you process his request. How do you manage changes in product specifications?
A. Change management
B. Integration management
C. Product management
D. Configuration management
Answer: D
If there is any change in the project’s parameter, you will manage it through change management. However, changes in product specifications should be managed through configuration change management.
Question 56:
Work authorization is a subsystem of the project management system, which is used by the project manager or any authorized person to run the project with command and control. Which statement is not true about the work authorization system?
A. It is used to manage the proper sequence of wor
B. It ensures how the project will be authorized
C. It defines approval levels to issue work authorization
D. It identifies the person accountable for each activity
Answer: D
The work authorization system does not identify the person accountable for the activity. This you can see in the RAM matrix.
Question 57:
Your organization manages many projects at one time. For your project, you have been assigned a place in a building to utilize for your project-related activities. However, to use this facility, you have to pay the electricity bill which is distributed to all project teams. This electricity bill is an example of:
A. Direct cost
B. Indirect cost
C. Variable cost
D. Fixed cost
Answer: B
Electricity cost will be an indirect cost because it is not directly affecting your project; however, you are using it for your office work.
Question 58:
You have been assigned as a project manager for an ongoing project. While reviewing the project documents you notice that the project does not have a risk management plan. What will your next step be?
A. As the project has already started, you will do nothing
B. Ignore the risk management plan
C.Start developing the risk management plan
D. Inform the stakeholders
Answer: C
Since there is no risk management plan, your first step would be to develop a risk management plan and then get it approved.
Question 59:
The client is asking for many changes in the project which is causing you to change the baseline many times. You are constantly estimating the cost of impact and raising the change request, and once it is approved, you will update the cost baseline. Which of the following should be updated frequently?
A. Cost baseline
B. Schedule baseline
C. Lessons learned
D. Project charter
Answer: C
The cost baseline, schedule baseline, and project charter cannot be updated frequently. They can be updated only after getting approval from the management; however, the lessons learned document should be updated continuously.
Question 60:
You are constructing an office building. Work has started and you are in the middle of your project. You feel that if you add one more floor to the building it will cost much less than if the client decides to add it in the future. This change, however, will lead to a change in various baselines and the project charter as well. Therefore, you discuss the
issue with all relevant stakeholders, and after their agreement, you process these change requests. In all of these changes, who is responsible for making this change in the project charter?
A. The project manager
B. The client
C. Management
D. The project management team
Answer: B
The client is the sponsor of the project
Question 61:
You have a project with a cost of 10,000 USD, and the duration is 10 months. Five months have passed, 45% of the work is completed and you have spent 5,500 USD. The value of this 45% of the work is known as:
A. Planned value
B. Earned value
C. Actual cost
D. Schedule variance
Answer: B
Earned value is the budgeted value of work that has been completed.
Question 62:
Management is sending a team of experts for a risk audit. You inform management that you have already completed the risk review process and did not find any shortcomings, so there is no need for a risk audit. However, management is firm on their decision. Which of the following is true about the risk audit and risk review?
A. A risk audit is performed to see the effectiveness of a risk response plan
B. A risk audit is performed to see if you are following the correct procedures
C. A risk review is performed to see if you are following the correct procedures
D. Both are the same but an audit is done by external experts and a review is done internally
Answer: B
In a risk audit, it is checked if you are following the correct procedures. On the other hand, in risk review you review the effectiveness of the risk management plan.
Question 63:
Your project is delayed because of some regulatory issues and the client has asked you to stop the work until he gets government clearance. The project team members are afraid that the project may be terminated early and you may need to enter into the close project process. In which of the following cases will you not perform the close project or close phase process?
A. When the project is terminated due to a cost overrun
B. When the project is terminated due to schedule overrun
C. The client decided to terminate the project
D. Perform the close project or close phase
Answer: D
If the project or phase is closed or terminated due to any reason, you will perform the close project or close phase process regardless of the reason behind it.
Question 64:
A new law is going to come into effect; after five years, all motor engines are required to be Euro IV compliant. Therefore, your company has given you a project to ensure that all processes and procedures are modified to produce Euro IV compliant engines when the law goes into effect. This project has arisen because of which need?
A. Legal requirement
B. Customer request
C. Technological advancement
D. Business need
Answer: A
You must follow the law, and following the law is a legal requirement.
Question 65:
Your organization has received two possible projects. The first project will give you 50,000 USD profit but it is a bit time-consuming, and the second project will give you 35,000 USD and it will complete earlier than the first project. Therefore, you select the second project. What is the opportunity cost of selecting the second project?
A. 50,000 USD
B. 35,000 USD
C. 85,000 USD
D. 15,000 USD
Answer: A
Opportunity cost is a value that you have lost by selecting another option.
Question 66:
You are determining the probability and impact of risks in order to find the expected monetary value and then the contingency reserve. Which of the following statements is true about the expected monetary value?
A. You don’t consider positive risks while calculating the EMV
B. You consider positive as well as negative risks while calculating the EMV
C. It is a tool and technique of the Perform Qualitative Risk Analysis Process
D. When the project is terminated due to schedule overrun
Answer: B
While calculating the expected monetary value, you will consider both types of risks. The EMV for the positive risks should be shown with a positive sign, and the EMV of the negative risks should be shown with a negative sign.
Question 67:
You are managing two projects. The first project is to design and construct a school building, and the second project is to construct an office building for your company’s employees. What is your current role?
A. Project manager
B. Program manager
C. Portfolio manager
D. Schedule manager
Answer: B
Since these two projects are of a similar type they will be managed under the program and your role will be the program manager.
Question 68:
You have been appointed as project manager for an ongoing project. Upon reviewing the project documents, you notice that a WBS was not created and work is moving ahead without it. What will your next step be?
A. You will continue to work without a WBS
B. Start developing the WBS immediately
C. Inform the customer
D. Investigate why the WBS was not developed
Answer: B
If there is no WBS, your next step is to develop the WBS immediately.
Question 69:
A risk occurred in your project. This was an identified risk, so the risk owner implemented the risk response plan and the risk was mitigated. Which of the following is least likely to be updated due to this action?
A. Project team assignments
B. Risk report
C. Issue log
D. Project management plan
Answer: D
All documents except the project management plan may be updated here because this was an identified risk and its impact and response were already factored into the project plan.
Question 70:
Your organization is evaluating a project to decide whether to go or not go for it. The estimated cost of this project is 500,000 USD and the duration of this project is three years. At the end of the first year, you will get 200,000 USD revenue, at the end of the second year, you will get 170,000 USD, and at the end of the third year, you will get 200,000 USD. Considering the 8% discount rate, which of the following statements is true about the NPV of the project?
A. The NPV is positive, you will go for it
B. The NPV is positive, you will not go for it
C. The NPV is negative, you will go for it
D. The NPV is negative, you will not go for it
Answer: D
First, look at the definition of the NPV:
“The Net Present Value (NPV) is the total cash generated by the project in today’s dollar minus the initial investment.”
Now, to find the NPV, you have to convert all money to the current value, and then you will subtract the initial investment from it. You will receive 200,000 USD at the end of the first year.
So, let’s find the present value of this 200,000.
We know the formula:
Future Value = Present Value (1 + rate / 100)time
Now,
200,000 = PV1 (1.08)1
PV1 = 200,000 / 1.08
= 185,185 USD
Now let’s find the Present Value of 170,000 USD, which you will receive at the end of
the second year.
170,000 = PV2 (1.08)2
170,000 = PV2 (1.17)
PV2 = 170,000 / 1.17
= 145,299 USD
Now let’s find the Present Value of 200,000 USD, which you will receive at the end of
the third year.
200,000 = PV3 (1.08)3
200,000 = PV3 (1.26)
PV3 = 200,000 / 1.26
= 158,730 USD
Now, we will add all these three values.
Present value of return = PV1 + PV2 + PV3
= 185,185 + 145,299 + 158,730
= 489,214 USD.
Therefore, profit = 489,214 – 500,000
= -10,786 USD
Therefore, the NPV of profit is negative which means you are at a loss, and you will not
select the project.
Question 71:
Many problems have arisen in your project and you are finding it difficult to manage. You decide to identify the problems, quantify the source, and solve them. Which of the following tools will you use here?
A. Tornado analysis
B. Pareto analysis
C. Ishikawa diagram
D. Latin Hypercube technique
Answer: B
In Pareto analysis, you quantify the problem according to the source and start solving the source which has the highest number of problems.
Question 72:
You are in the process of planning human resources and developing the roles and responsibilities for your team members. Which of the following will you not address during this process?
A. Role
B. Authority
C. Training
D. Competency
Answer: C
Training issues are managed in the development project team process.
Question 73:
During the risk qualification process, you have identified many risks with a low impact or probability of happening. How will you deal with these risks?
A. Ignore them
B. Analyze them further
C. Keep on the watch list
D. Plan a risk response for them
Answer: C
These are low-priority risks, and low-priority risks are kept on the watch list for future monitoring.
Question 74:
You have an agreement with one of your suppliers which allows you to make limited changes in some exceptional situations. Under one such situation, you make some changes in the scope of the work. What will your next step be?
A.Call the supplier and inform them about it
B. Call for a meeting with the supplier to discuss the change
C. Send an official memo informing about this change
D. Plan a risk response for them
Answer: C
You are already in an agreement, so you will make the change and inform the supplier through formal written communication.
Question 75:
You are analyzing whether the stakeholders are resistant, neutral, or supporting and noting down all the information in a table. What tool is this?
A. Stakeholder register
B. Stakeholders engagement assessment matrix
C. RACI chart
D. RAM
Answer: B
You are using a stakeholder engagement assessment matrix, which is a tool and technique of the plan stakeholder management process.
Question 76:
John has been assigned a task to build a facility where different types of bicycles can be produced. John builds this facility and hands it over to Andrew to run it. What is Andrew’s role?
A. Project manager
B. Program manager
C. Operation manager
D. Portfolio manager
Answer: C
Andrew will be running the factory to produce the bicycles, where he will be managing operations to production cycles.
Question 77:
Your project is complete and the product is ready to be delivered. The client inspects the deliverable and accepts it. What process is this?
A. Close procurement
B. Close project
C. Validate scope
D. Verify scope
Answer: C
In the Validate Scope process, the customer accepts the deliverables or the product.
Question 78:
You have been assigned as a project manager for an ongoing project. After joining the project, you start reviewing the project document and notice that the WBS dictionary has many discrepancies. Due to these discrepancies, which of the following will be least affected?
A. Resources required
B. Description of the work
C. Code of account identifiers
D. Training program for team members
Answer: D
Training issues are managed in the development project team process, so it will not be affected by discrepancies in the WBS dictionary
Question 79:
Based on the below-given diagram, which statement is correct?
A. In the second month, the project was under budget
B. In the fourth month, the project was ahead of schedule
C. In the third month, the project was under budget
D. In the fifth month, the project is behind schedule
Answer: A
If you see the graph for the actual cost (AC), it is below the planned value (PV), which means you were under budget in the second month.
Question 80:
You have been producing ball bearings in large numbers. For this kind of process, what technique will you use to verify if the products are of the right quality?
A. Inspection of all products
B. Statistical sampling
C. Inspection of the first three samples
D. Inspection of the last three samples
Answer: B
In statistical sampling, you take a small number of samples at random from the batch and check them to see if the products are of the right quality.
Question 81:
You are having some issues in your project, therefore, you bring all team members into the war room to resolve the issues. What is the purpose of the war room?
A. To punish guilty members
B. To keep members in isolation
C. Enhance communication
D. Esclude communication
Answer: C
The purpose of the war room is to enhance communication and the sense of community. Colocation is sometimes referred to as a war room.
Question 82:
You have two mutually exclusive events, which have a chance of happening of 15% and 25%. What is the chance that one of them will occur?
A. 40%
B. 60%
C. 15%
D. 25%
Answer: A
Since these events are mutually exclusive, the chance of any one of them happening = 0.15 + 0.25 = 40%
Question 83:
Due to a shortage of funds, a client asks you to end the project immediately. What will your next step be?
A. Try to convince the client to not close the project
B. Discuss the issue with your team members
C. Enter the close procurement process
D. Enter the close project process
Answer: D
If the project is closed or terminated due to any reason, you will start the Close Project Process.
Question 84:
Which of the following is not an interpersonal skill that the project manager will use to manage stakeholders’ expectations?
A. Active listening
B. Overcoming resistance to change
C. Punishment
D. Building trust
Answer: C
Punishment is not an interpersonal skill.
Question 85:
You have bought a piece of the land worth 120,000 USD. You also have an agreement with the company that if you return this land to them after 2 years, they will give you 160,000 USD. What is the appreciation rate?
A. 15.5
B. 20
C. 10
D. 7
Answer: A
We know that,
FV = PV * (1 + r / 100)time
160,000 = 120,000(1 + r / 100)2
(1 + r / 100)2 = 4 / 3
(1 + r / 100) = 2/1.731
(1 + r / 100) = 1.155
r / 100 = 0.155
r = 15.5
Question 86:
During the execution phase many small, unforeseen incidents happen which you manage with a workaround. What will your first step be after managing these unforeseen incidents?
A. Raise the change request
B. Update the cost baseline
C. Update the schedule baseline
D. Record it in lessons learned
Answer: D
Since you have managed these through the workaround, there is no need to update any change request or update the project management plan. You will simply record it as lessons learned.
Question 87:
You are designing a motor engine. During the design phase, you find that the technique required to develop the piston is a bit more advanced than the technology you currently possess. Although you can acquire this technology, it is too time-consuming. On the other hand, there is a supplier that can provide you with the same component but at a higher cost. You are still discussing the options with your team members. Which technique are you using here?
A. Select seller
B. Source selection criteria
C. Make or buy analysis
D. WBS
Answer: C
This is an example of make or buys analysis
Question 88:
Which of the following is not a management skill that a project manager will use to get support from the stakeholders?
A. Facilitate consensus
B. Resolving conflicts
C. Negotiate agreement to satisfy needs
D. Discipline
Answer: B
Resolving conflict is an interpersonal skill, not a management skill.
Question 89:
You are responsible for IT maintenance in your organization. The head of the IT department comes to you with an internet security expert and tells you to disable auto-login and force authentic login based on a new password. The password will be 15 characters long and consist of letters, numerals, and one special character, and this password must expire after every 30 days. This is an example of:
A. Operation
B. Project
C. Maintenance
D. HR
Answer: B
Since you are adding a function to a system, this will be an example of a project.
Question 90:
Based on the below-given diagram, which statement is correct?
A. In the second month, the project was under budget
B. In the fourth month, the project was ahead of schedule
C. In the third month, the project was under budget
D. In the fifth month, the project is behind schedule
Answer: A
If you see the graph for the actual cost (AC), it is below the planned value (PV), which means you were under budget in the second month.
Question 91:
You have been assigned as a project manager for an ongoing project. While reviewing the project documents you notice that the project does not have a risk management plan. What will your next step be?
A. As the project has already started, you will do nothing
B. Ignore the risk management plan
C. Start developing the risk management plan
D. Inform the stakeholders
Answer: C
Since there is no risk management plan, your first step would be to develop a risk management plan and then get it approved.
Question 92:
Your project is delayed and you are trying to compress the schedule so that you can bring your project on track. While reviewing the activities of your project, you notice that plumbing work starts after completing electrical work. You discuss these two activities with your team members and reach a conclusion that these two activities can start at the
same time. Therefore, you make a change to the plan to start these two activities together. Which technique are you using here?
A. Resource leveling
B. Resource optimization
C. Crashing
D. WBS
Answer: C
Since you are performing two activities in parallel to save time, this is an example of fast-tracking.
Question 93:
Your organization is following a methodology where the long-term approach is customer satisfaction, and to achieve this objective all members of your organization participate. What methodology is this?
A. JIT
B. KAIZEN
C. KANBAN
D. TQM
Answer: D
Since you are performing two activities in parallel to save time, this is an example of fast-tracking.
Question 94:
When any phase closes, some type of hand-off happens. Which of the following options
is not a name for this point?
A. Milestone
B. Kill point
C. Stage gate
D. Exit point
Answer: D
Except for the exit point, all others are recognized terms for the hand-off that happens after the phase closure.
Question 95:
You get some information that two of your members are going to have a conflict on some issues and this may affect your project performance. To stop this conflict from happening, what kind of communication will you use initially?
A. Formal verbal
B. Informal verbal
C. Formal written
D. Informal written
Answer: B
For every conflict, first, you will try to solve it in private with informal verbal communication. If it does not yield any results, you will consider other options.
Question 96:
A SWOT analysis helps you identify opportunities that arise from organizational strengths threats dues to its weakness. According to this analysis, analyzing the strengths and weaknesses is a part of:
A. Internal factors
B. External factors
C. Discretionary factors
D. Mandatory factors
Answer: A
SWOT stands for strengths, weaknesses, opportunities, and threats. A SWOT analysis is used to find the strengths and weaknesses of an organization, and the opportunities and threats for the project.
Question 97:
You are performing the inspection of a deliverable with your contractor to determine if the deliverable is meeting requirements. After being satisfied with the inspection, you accept the deliverable. Which process are you in?
A. Quality control
B. Validate scope
C. Close procurement
D. Procurement audit
Answer: B
In the Validate Scope process, you accept the deliverables.
Question 98:
The Control Stakeholder Engagement process helps you increase the effectiveness of stakeholders’ engagement with your project. Which of the following is not an output of this process?
A. Change request
B. Project document update
C. Issue log
D. OPA update
Answer: C
An issue log is an output of the managed stakeholder engagement process and the input to control the stakeholder engagement process.
Question 99:
You are going to apply for registration of your company in a new country. There are two routes to apply within the registration process: the first route is the normal process where you have to pay a fee and become registered. The other is an express process where you have to pay more to get registered faster. You need to register your company quickly, otherwise, you will not be able to apply for a project. Your organization has given you free hand to get registered. What will your next step
A. You will never pay more, and you will go for the normal route
B. You will report to the authorities
C. You will discuss this with your team members
D. You will go for the express route
Answer: D
Since you need to register quickly, you will go for the express route, although it is expensive. Please note that here you are not doing anything illegal, this is just a legal procedure with an express route which involves a higher fee.
Question 100:
You have signed a Cost Plus Incentive Fee contract with the client. The details of the contract are as follows:
Target cost: 300,000 USD
Target fee: 30,000 USD
Maximum fee: 40,000 USD
Minimum fee: 15,000 USD
Share ratio: 60/40
You have completed the work and the actual cost is 270,000 USD. The amount you will be paid from the client will be:
A. 312,000 USD
B. 310,000 USD
C. 330,000 USD
D. 315,000 USD
Answer: B
The target cost is 300,000 USD and you have completed the project for 270,000 USD.
This means you have saved 30,000 USD and this amount will be shared between you as per the agreed formula.
Your share = 40% of the 30,000 USD
= 12,000 USD
Now the fee paid to you = 30,000 + 12,000
= 42,000 USD
So, is this the real fee that the client is going to pay you? No, because this amount is exceeding the maximum fee of 40,000 USD.
Therefore, the client will pay you 40,000 USD as a fee.
Now the actual price paid to you = 270,000 + 40,000
= 310,000 USD