1. Right Answer: A
Explanation: Sensitivity analysis is the quantitative risk analysis technique that: Assist in determination of risk factors that have the most potential impact Examines the extent to which the uncertainty of each element affects the object under consideration when all other uncertain elements are held at their baseline valuesIncorrect Answers:B: Fault tree analysis provides a systematic description of the combination of possible undesirable occurrences in a system. It does not measure the extent of uncertainty.C: Cause-and-effect analysis involves the use of predictive or diagnostic analytical tool for exploring the root causes or factors that contribute to positive or negative effects or outcomes, and not the extent of uncertainty.D: Scenario analysis provides ability to see a range of values across several scenarios to identify risk in specific situation. It provides ability to identify those inputs which will provide the greatest level of uncertainty. But it plays no role in determining the extent of uncertainty.

2. Right Answer: C
Explanation: Expert judgment is utilized in developing risk responses, including feedback and guidance from risk management experts and those internal to the project qualified to provide assistance in this process. Expert judgment is a technique based on a set of criteria that has been acquired in a specific knowledge area or product area. It is obtained when the project manager or project team requires specialized knowledge that they do not possess. Expert judgment involves people most familiar with the work of creating estimates. Preferably, the project team member who will be doing the task should complete the estimates. Expert judgment is applied when performing administrative closure activities, and experts should ensure the project or phase closure is performed to the appropriate standards.Incorrect Answers:A: Contingent response strategy, also known as contingency planning, involves adopting alternatives to deal with the risks in case of their occurrence. Unlike the mitigation planning in which mitigation looks to reduce the probability of the risk and its impact, contingency planning doesn't necessarily attempt to reduce the probability of a risk event or its impacts. Contingency comes into action when the risk event actually occurs.B: Risk acceptance means that no action is taken relative to a particular risk; loss is accepted if it occurs. If an enterprise adopts a risk acceptance, it should carefully consider who can accept the risk. Risk should be accepted only by senior management in relationship with senior management and the board. There are two alternatives to the acceptance strategy, passive and active. Passive acceptance means that enterprise has made no plan to avoid or mitigate the risk but willing to accept the consequences of the risk. Active acceptance is the second strategy and might include developing contingency plans and reserves to deal with risks.D: Risk transfer means that impact of risk is reduced by transferring or otherwise sharing a portion of the risk with an external organization or another internal entity. Transfer of risk can occur in many forms but is most effective when dealing with financial risks. Insurance is one form of risk transfer.

3. Right Answer: B
Explanation: Business risk relates to the likelihood that the new system may not meet the user business needs, requirements and expectations. Here in this stem it is said that the business requirements that were to be addressed by the new system are still unfulfilled, therefore it is a business risk.Incorrect Answers:A: This is one of the components of risk. Inherent risk is the risk level or exposure without applying controls or other management actions into account. But here in this stem no description of control is given, hence it cannot be concluded whether it is an inherent risk or not.C: Project risk are related to the delay in project deliverables. The project activities to design and develop the system exceed the limits of the financial resources set aside for the project. As a result, the project completion will be delayed. They are not related to fulfillment of business requirements.D: This is one of the components of risk. Residual risk is the risk that remains after applying controls.But here in this stem no description of control is given, hence it cannot be concluded whether it is a residual risk or not.

4. Right Answer: A,C
Explanation: Unlike the quantitative risk assessment, qualitative risk assessment does not assign dollar values. Rather, it determines risk's level based on the probability and impact of a risk. These values are determined by gathering the opinions of experts. Probability- establishing the likelihood of occurrence and reoccurrence of specific risks, independently, and combined. The risk occurs when a threat exploits vulnerability. Scaling is done to define the probability that a risk will occur. The scale can be based on word values such as Low, Medium, or High. Percentage can also be assigned to these words, like 10% to low and 90% to high. Impact- Impact is used to identify the magnitude of identified risks. The risk leads to some type of loss. However, instead of quantifying the loss as a dollar value, an impact assessment could use words such as Low, Medium, or High. Impact is expressed as a relative value. For example, low could be 10, medium could be 50, and high could be 100.Risk level = Probability * ImpactIncorrect Answers:B, D: These are used for calculating Annual loss expectancy (ALE) in quantitative risk assessment. Formula is given as follows:ALE= SLE * ARO

5. Right Answer: C
Explanation: Risk appetite considers the qualitative and quantitative aspects of accepting risks in an organization. The term refers to the type of risks the organization is willing to pursue, as well as amount of risk and the level of risk.Risk appetite is the amount of risk a company or other entity is willing to accept in pursuit of its mission. This is the responsibility of the board to decide risk appetite of an enterprise. When considering the risk appetite levels for the enterprise, the following two major factors should be taken into account: The enterprise's objective capacity to absorb loss, e.g., financial loss, reputation damage, etc. The culture towards risk taking-cautious or aggressive. In other words, the amount of loss the enterprise wants to accept in pursue of its objective fulfillment.Incorrect Answers:A, B: Aversion and hedging are related to each other and represents the avoidance of risk within the organization.D: The acceptable variation relative to the achievement of an objective is termed as risk tolerance. In other words, risk tolerance is the acceptable deviation from the level set by the risk appetite and business objectives.Risk tolerance is defined at the enterprise level by the board and clearly communicated to all stakeholders. A process should be in place to review and approve any exceptions to such standards.