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    Question

    Which of the following best describes a risk specific

    to a project, and arising on account of deficiencies in planning/execution capability of the project sponsor/concessionaire?
    A Project Risk Correct Answer Incorrect Answer
    B Exogenous risk Correct Answer Incorrect Answer
    C Endogenous risk Correct Answer Incorrect Answer
    D Execution risk Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    “Endogenous Risks” – risks which are endogenous to the specific project, and mainly arise on account of deficiencies in planning/execution capability of the project sponsor/concessionaire. These may lead to cost overruns, time overruns, change in ownership, etc.  “Exogenous Risks” – risks which are exogenous to a specific project and which may adversely impact some or most of the entities in the economy or in a specific sector or in a specific geographic region. These factors may be natural calamities, pandemic, change in government policy/regulation/law, etc., and their impact may give rise to cost overruns and/or time overruns. Project risk is a wider term including all types of risk both endogenous and exogenous to the project.

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