CAP · Question #7
Your project has several risks that may cause serious financial impact should they happen. You have studied the risk events and made some potential risk responses for the risk events but management wa
The correct answer is D. Contingency reserve. When you chart risk events with their probability and financial impact, you are performing Expected Monetary Value (EMV) analysis - a core quantitative risk technique. The primary outcome of this analysis is determining the Contingency Reserve (D), which is the budget set aside t
Question
Your project has several risks that may cause serious financial impact should they happen. You have studied the risk events and made some potential risk responses for the risk events but management wants you to do more. They'd like for you to create some type of a chart that identified the risk probability and impact with a financial amount for each risk event. What is the likely outcome of creating this type of chart?
Options
- ARisk response plan
- BQuantitative analysis
- CRisk response
- DContingency reserve
How the community answered
(27 responses)- A15% (4)
- B7% (2)
- C4% (1)
- D74% (20)
Explanation
When you chart risk events with their probability and financial impact, you are performing Expected Monetary Value (EMV) analysis - a core quantitative risk technique. The primary outcome of this analysis is determining the Contingency Reserve (D), which is the budget set aside to address identified risk events based on their probability-weighted financial impact. A risk response plan (A) is a broader document. 'Quantitative analysis' (B) is the process itself, not the outcome. A 'risk response' (C) is the action taken, not the result of building this specific financial chart.
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