PMI Risk Management Professional Practice Exam

What change might reflect a management shift from risk-averse to risk-seeking in a probability and impact matrix?

1. A higher risk rating is needed before a threat is avoided, transferred, or mitigated.

2. The very high category for impact will have a higher percentage assigned to it.

3. The very high category for probability will have a lower percentage assigned to it.

4. A lower risk rating is needed before an opportunity is avoided, transferred, or mitigated.

The correct answer is: A higher risk rating is needed before a threat is avoided, transferred, or mitigated.

The correct answer indicates that a higher risk rating is necessary before a threat is avoided, transferred, or mitigated, which illustrates a shift from a risk-averse to a risk-seeking management approach. In a risk-averse mindset, organizations typically strive to minimize risks, opting for protective measures even for lower risk ratings. This is reflected in a tendency to act on threats at a lower risk threshold. In contrast, a risk-seeking management approach demonstrates a greater willingness to accept risks and potential negative impacts before taking actions such as avoidance, transfer, or mitigation. By requiring a higher risk rating to trigger these protective actions, management signals a readiness to pursue opportunities, even if they accompany certain risks. This change suggests a willingness to engage with riskier situations, which may reflect a strategy aimed at achieving potentially greater rewards and fostering innovation. The other choices either do not illustrate a clear transition to a risk-seeking approach or reflect an increased caution rather than a shift in mindset. For instance, adjusting impact or probability categories does not inherently indicate a shift in attitude toward risk; rather, it may just indicate different criteria for assessing risk rather than a fundamental change in how risks are approached.