PrepAway - Latest Free Exam Questions & Answers

Which one of the following is NOT an example of the transference risk response?

The risk transference is referred to the transfer of risks to a third party, usually for a fee, it creates a contractual-relationship for the third party to manage the risk on behalf of the performing organization. Which one of the following is NOT an example of the transference risk response?

PrepAway - Latest Free Exam Questions & Answers

A.
Use of insurance

B.
Life cycle costing

C.
Performance bonds

D.
Warranties

Explanation:

Life cycle costing describes the cost of ownership for a project’s product. It is not a risk response, but informs the stakeholders that what it will cost to support the deliverable of the project. Transference is a strategy to mitigate negative risks or threats. In this strategy, consequences and the ownership of a risk is transferred to a third party. This strategy does not eliminate the risk but transfers responsibility of managing the risk to another party. Insurance is an example of transference. Answer options A, C, and D are incorrect. These are an example of the risk response transference. Reference: "Project Management Body of Knowledge (PMBOK Guide), Fourth Edition"

One Comment on “Which one of the following is NOT an example of the transference risk response?


Leave a Reply