CAP · Question #94
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…
The correct answer is C. Contingency reserve. When you assign financial values to risk events by multiplying probability by monetary impact (Expected Monetary Value, or EMV), the primary outcome and use of that analysis is to establish a contingency reserve. The contingency reserve is a budget set aside to cover identified…
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
- AQuantitative analysis
- BRisk response plan
- CContingency reserve
- DRisk response
How the community answered
(38 responses)- A13% (5)
- B5% (2)
- C74% (28)
- D8% (3)
Explanation
When you assign financial values to risk events by multiplying probability by monetary impact (Expected Monetary Value, or EMV), the primary outcome and use of that analysis is to establish a contingency reserve. The contingency reserve is a budget set aside to cover identified risks should they occur, and it is directly sized using the quantified financial exposure from such a chart. While creating the chart itself is part of quantitative risk analysis, the question asks about the 'likely outcome' - meaning the deliverable or result produced. That result is the contingency reserve amount. A risk response plan and risk responses are separate outputs that describe how risks will be handled, not the financial buffer established from EMV calculations.
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