CAPM (Certified Associate in Project Management) Practice Exam

Which statement best defines the role of a Risk Breakdown Structure?

1. It quantifies the financial impact of each identified risk.

2. It is a timeline for when risks are most likely to occur.

3. It is a hierarchical decomposition of the project's risks.

4. It assigns risk responses to the project team members.

The correct answer is: It is a hierarchical decomposition of the project's risks.

A Risk Breakdown Structure (RBS) is a hierarchical representation of risks organized by categories or risk sources, providing a systematic way of identifying and understanding risks within a project. It helps in breaking down project risks into smaller, more manageable components, which aids in effective risk management throughout the project lifecycle. This structure assists project managers in comprehensively identifying and addressing risks by categorizing them in a structured format. Option A is incorrect as quantifying the financial impact of each risk is typically done in a risk register or through quantitative risk analysis rather than in an RBS. Option B is incorrect as a timeline for when risks are most likely to occur is usually represented in a risk register or a project schedule, not within an RBS. Option D is incorrect as assigning risk responses to project team members is typically done through a responsibility assignment matrix (RAM) rather than within an RBS.