PMI-RMP · Question #105
A high-profile, high-priority project within your organization is being created. Management wants you to pay special attention to the project risks and do all that you can to ensure that all of the…
The correct answer is D. Utility function. A utility function (also called risk utility or risk tolerance curve) describes an individual's or organization's willingness to accept risk in exchange for potential reward. Risk-averse stakeholders have a utility function that places a higher value on certainty and lower…
Question
A high-profile, high-priority project within your organization is being created. Management wants you to pay special attention to the project risks and do all that you can to ensure that all of the risks are identified early in the project. Management has to ensure that this project succeeds. Management's risk aversion in this project is associated with what term?
Options
- AQuantitative risk analysis
- BRisk conscience
- CRisk mitigation
- DUtility function
How the community answered
(51 responses)- A8% (4)
- B16% (8)
- C4% (2)
- D73% (37)
Explanation
A utility function (also called risk utility or risk tolerance curve) describes an individual's or organization's willingness to accept risk in exchange for potential reward. Risk-averse stakeholders have a utility function that places a higher value on certainty and lower exposure to loss. Management's strong desire to avoid risk on this high-priority project is a direct expression of their utility function. Quantitative risk analysis, risk mitigation, and 'risk conscience' describe processes or generic awareness, not the formal term for an individual's risk attitude.
Topics
Community Discussion
No community discussion yet for this question.