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Risk

Risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives.

Why this domain matters

Projects operate in uncertainty. The risk domain helps the team identify, analyze, and respond to potential threats and opportunities before they become issues or missed chances. Proactive risk management reduces surprises, improves decision-making, and protects project objectives such as time, cost, scope, quality, and benefits.

Key concepts

  • Threats and opportunities: negative and positive risks that can affect project objectives.
  • Risk register: a living document capturing identified risks, analysis, responses, and owners.
  • Qualitative and quantitative analysis: assessing probability, impact, and overall risk exposure.
  • Risk response strategies: avoid, mitigate, transfer, accept for threats; exploit, enhance, share, accept for opportunities.
  • Risk owner: the person responsible for monitoring and implementing the agreed response.

Common pitfalls and exam traps

  • Treating risk identification as a single workshop instead of an ongoing activity.
  • Focusing only on threats and ignoring opportunities that could improve outcomes.
  • Not assigning clear owners for high-priority risks.
  • Failing to update risk responses when conditions change or new information appears.
  • Exam trap: jumping straight to implementation actions without analyzing and planning the risk response appropriately.

PMP Example Question

PMP Example Question

During a risk review, the team identifies a new high-probability, high-impact threat that could delay a critical milestone. The risk has been added to the risk register. What should the project manager do next?

  1. Increase contingency reserves to cover any potential delays.
  2. Immediately escalate the risk to the sponsor and request schedule relief.
  3. Work with the team to analyze the risk and develop an appropriate risk response strategy.
  4. Close the risk because it has already been documented in the risk register.

Correct Answer: C — Work with the team to analyze the risk and develop an appropriate risk response strategy.

Explanation:Adding the risk to the register is only the first step. The project manager must perform appropriate analysis and plan a response, assigning an owner and actions. Automatically increasing reserves or escalating without analysis may be premature, and closing the risk is clearly incorrect.

How To Land the Job and Interview for Project Managers Course

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