PMP Exam Set E – Q20

The sponsor and the project manager are discussing what type of contract the project manager plans to use on the project. The buyer points out that the performing organization spent a lot of money hiring a design team to come up with the design. The project manager is interested in seeing that the risk for the buyer be as small as possible. An advantage of a fixed price contract for the buyer is:

A. There is no risk at all.
B. Risk is shared by all parties
C. Cost Risk is Lower
D. Cost Risk is Higher

C. Cost Risk is Lower