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Pass DTFL Exam Cram

Exam Code: DTFL

Exam Name: Design Thinking Foundation Level

Version: V15.35

Q & A: 208 Questions and Answers

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Wendy has identified a risk event in her project that has an impact of $75,000 and a 60 percent chance of happening. Through research, her project team learns that the risk impact can actually be reduced to just
$15,000 with only a ten percent chance of occurring. The proposed solution will cost $25,000. Wendy agrees to the $25,000 solution. What type of risk response is this?
A. Mitigation
B. Transference
C. Enhancing
D. Avoidance
Answer: A
Risk mitigation implies a reduction in the probability and/or impact of an adverse risk event to be within acceptable threshold limits. Taking early actions to reduce the probability and/or impact of a risk occurring on the project is often more effective than trying to repair the damage after the risk has occurred.
Incorrect Answers:
B: Avoidance changes the project plan to avoid the risk altogether.
C: Transference requires shifting some or all of the negative impacts of a threat, along with the ownership of the response, to a third party. Transferring the risk simply gives another party the responsibility for its management-it does not eliminate it.
Transferring the liability for a risk is most effective in dealing with financial risk exposure. Risk transference nearly always involves payment of a risk premium to the party taking on the risk.
D: Enhancing is actually a positive risk response. This strategy is used to increase the probability and/or the positive impact of an opportunity. Identifying and maximizing the key drivers of these positive-impact risks may increase the probability of their occurrence.

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