The CEO has authorized the development of a complex financial product for a company to provide greater future benefits. The budget has been acquired through financing with global investors who expect all risks to be identified as soon as possible.
What should the project manager use to identify the risks?
To identify the risks associated with developing a complex financial product, the project manager should rely on expert judgment. Expert judgment involves consulting with individuals or groups with specialized knowledge or experience in financial products and risk management. These experts provide in-depth insights into potential risks, assess their likelihood and impact, and offer recommendations for mitigation strategies. This approach is particularly effective for understanding the nuanced and complex risks involved in financial product development, ensuring a comprehensive and accurate risk identification process.
Both techniques (B, C) are used in the Identify Risks process. However, SWOT might help to identify more risks. PMBOK: "SWOT analysis. This technique examines the project from each of the strengths, weaknesses, opportunities, and threats (SWOT) perspectives. For risk identification, it is used to increase the breadth of identified risks by including internally generated risks."
Expert judgement.
Choose B because investor request ALL risk need to indentify as soon as possible. key word is the ALL risk
First B then C
Answer should be C
The project manager should **C. Use expert judgment** to identify the risks. Expert judgment involves consulting with individuals or groups with specialized knowledge or training to identify potential risks. These could be subject matter experts within the organization, industry experts, or other knowledgeable individuals. Their expertise can provide valuable insights into potential risks that may not be immediately apparent to others involved in the project. This is particularly important in a complex financial project where the risks can be significant and varied.
C. Expert judgment To identify risks in a complex financial project, the project manager should rely on expert judgment. Expert judgment involves seeking input and insights from individuals or groups with relevant experience and expertise in financial products and risk management. These experts can help identify potential risks, assess their likelihood and impact, and provide recommendations for risk mitigation and management strategies.
Question says: all risks should be identified ASAP. Early identification of risks is crucial, especially for a complex financial product development project with global investors, as it allows you to proactively plan for risk mitigation and develop appropriate strategies to address potential challenges. Experts can help you identify both common and unique risks associated with such projects, ensuring a thorough assessment and proactive risk management approach. SWOT analysis tends to focus on broader strategic aspects and may not capture the specific risks associated with technical, operational, regulatory, and market factors that are critical in complex financial product development. Risks identified through a SWOT analysis might be high-level and general.
SWOT is a tool used in the Identify Risk process.
To identify risks for a complex financial product development, the project manager should use a combination of risk identification techniques to ensure all potential risks are identified and addressed. Therefore, the most appropriate option is C - expert judgment.
C. The project involves a complex financial product, which suggests that the project manager needs to have experience or knowledge about financial instruments and associated risks. The investors expect all risks to be identified as soon as possible, and using expert judgment is the most effective and efficient way to identify these risks. An analysis of shared risks between parties or a SWOT analysis may be helpful in identifying risks associated with the project, but these methods are not as effective as expert judgment when it comes to identifying complex financial risks.
Sticking to B
B. Strengths, weaknesses, opportunities, and threats (SWOT) analysis
C. Expert judgment
why not C?
C might be a better answer, I think that SWOT is normally used for the business as a whole, but I'm not entirely sure.