PMI Risk Management Professional Practice Exam

What is a contingency plan in risk management?

1. A long-term project plan

2. A plan for maintaining budget control

3. A plan to execute only if specific risks arise

4. A general risk assessment document

The correct answer is: A plan to execute only if specific risks arise

A contingency plan in risk management is specifically designed to be implemented if certain predetermined risks occur. It outlines the steps and actions that will be taken to address these risks effectively, ensuring the project can continue smoothly despite unforeseen issues. This proactive approach enables organizations to minimize disruption and quickly adapt to changing circumstances. By having a contingency plan in place, project managers can prepare for potential setbacks by mapping out alternative strategies and resources to mitigate the impact of risks. This readiness enhances overall project resilience and helps maintain progress towards project goals even when faced with challenges. In contrast, the other options do not accurately capture the essence of a contingency plan. A long-term project plan typically focuses on overall timelines and deliverables rather than specific risk responses. Maintaining budget control is an ongoing financial management practice and does not focus on risk management specifically. A general risk assessment document identifies potential risks and their impacts but lacks the actionable framework that a contingency plan provides for addressing those risks when they arise.