PMI Risk Management Professional Practice Exam

When a project's constraints are ranked as time, scope, quality, and cost, what should be done with a budget risk from staffing expenses that is low impact and moderate probability?

1. Avoid the action that would generate the risk event.

2. Do nothing except place it on a watch list.

3. Mitigate the risk using limits on overtime.

4. Transfer the risk to a contractor.

The correct answer is: Do nothing except place it on a watch list.

The option suggesting to do nothing except place the budget risk on a watch list is appropriate in this situation because it focuses on managing risks that are categorized as low impact and moderate probability. When a risk has a low impact on the project, it means that even if the risk event occurs, it will not significantly affect the overall outcome or objectives of the project. Furthermore, a moderate probability indicates that while there’s some chance of the risk occurring, it is not so high as to necessitate immediate or intensive intervention. By placing the risk on a watch list, the project team remains aware of its potential occurrence without expending unnecessary resources or effort to mitigate, transfer, or avoid it. This approach allows the team to monitor the risk and implement appropriate measures if its status changes, ensuring that attention is focused on higher-impact risks that could jeopardize project success. In projects prioritizing time, scope, quality, and cost, it is essential to balance risk management efforts with the overall project goals, making it more sensible to keep an eye on lower-level risks rather than diverting resources that could be better used addressing more significant threats.