PMI Risk Management Professional Practice Exam

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What method can be used to visualize and analyze the potential impact of identified risks?

Probability/impact matrix
Stakeholder analysis
Cost-benefit analysis
Feedback loop

The correct answer is: Probability/impact matrix

The probability/impact matrix is a highly effective tool for visualizing and analyzing the potential impact of identified risks. This matrix allows project managers and teams to plot risks based on two key variables: the likelihood of each risk occurring (probability) and the severity of its potential effects on project objectives (impact). By positioning risks within this matrix, teams can easily prioritize which risks require immediate attention and which ones may be monitored over time. Using this method, stakeholders can quickly identify high-priority risks that have both a high probability of occurrence and a significant impact, allowing for more informed decision-making and resource allocation. It also provides a clear visual representation that can facilitate communication and discussions around risk management strategies among team members and stakeholders.