Multiple Choice QuestionWhat best describes a contingency fund for a project?Multiple choice question.A reserve to manage known and unknown negative project risk.A reserve to manage known and unknown positive project risks.A reserve to manage all known and unknown project risks.This is a form of padding used in estimates.
Question
Multiple Choice QuestionWhat best describes a contingency fund for a project?Multiple choice question.A reserve to manage known and unknown negative project risk.A reserve to manage known and unknown positive project risks.A reserve to manage all known and unknown project risks.This is a form of padding used in estimates.
Solution 1
A contingency fund for a project is best described as:
A reserve to manage known and unknown negative project risks.
This is because a contingency fund is typically set aside to cover potential costs or financial risk that might arise during a project due to unexpected events or challenges. These are usually negative risks that could potentially derail the project or increase its costs.
Solution 2
A contingency fund for a project is best described as:
A. A reserve to manage known and unknown negative project risks.
A contingency fund is a reserve of money set aside to cover possible unforeseen future costs in a project, particularly those that arise from risks. These risks are typically negative, such as delays, cost overruns, or unexpected obstacles or issues that arise during the project. This fund is not used to manage positive risks or as a form of padding in estimates.
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