nerdexam
IIBA

CBAP · Question #66

You are preparing the business case for a proposed solution in your organization. You need to identify several components for the business case including an assessment of the risks the solution may…

The correct answer is A. Risk is an uncertain event or condition that may have both positive and negative affects on. The standard definition of risk in business analysis and project management includes both positive (opportunity) and negative (threat) uncertain events - not just losses or failures.

Strategy Analysis

Question

You are preparing the business case for a proposed solution in your organization. You need to identify several components for the business case including an assessment of the risks the solution may contain. Which one of the following is the best definition of a risk as it pertains to the business case?

Options

  • ARisk is an uncertain event or condition that may have both positive and negative affects on
  • BRisk is an uncertain event that can cause the organization to lose more monies than it
  • CRisk is a potential event that can cause the solution to fail.
  • DRisks are threats to the organization's success.

How the community answered

(62 responses)
  • A
    77% (48)
  • B
    6% (4)
  • C
    13% (8)
  • D
    3% (2)

Why each option

The standard definition of risk in business analysis and project management includes both positive (opportunity) and negative (threat) uncertain events - not just losses or failures.

ARisk is an uncertain event or condition that may have both positive and negative affects onCorrect

Risk is defined as an uncertain event or condition that, if it occurs, has a positive or negative effect on objectives - this dual nature is a foundational concept in both BABOK and PMBOK. The inclusion of positive effects (opportunities) distinguishes a precise definition from a colloquial one. A complete business case must account for both upside and downside risk scenarios when assessing a proposed solution.

BRisk is an uncertain event that can cause the organization to lose more monies than it

This definition incorrectly restricts risk to only financial losses and excludes positive risk (opportunities), making it incomplete.

CRisk is a potential event that can cause the solution to fail.

Limiting risk to events that cause solution failure ignores broader organizational impacts and the positive dimension of risk.

DRisks are threats to the organization's success.

Describing risks only as threats omits the opportunity side of risk and is too narrow for a formal business case assessment.

Concept tested: Definition of risk in a business case

Source: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok

Topics

#risk definition#business case#risk assessment#positive and negative impacts

Community Discussion

No community discussion yet for this question.

Sign up to join the discussion
Full CBAP Practice