PMI Risk Management Professional Practice Exam

When conducting a risk analysis, what does the term 'impact' refer to?

1. The likelihood of a risk event occurring.

2. The consequences of a risk event on project objectives.

3. The amount of resources needed for mitigation.

4. The time required for risk assessment.

The correct answer is: The consequences of a risk event on project objectives.

In the context of risk analysis, 'impact' specifically refers to the consequences that a risk event can have on the project's objectives. This encompasses how a risk could potentially affect various dimensions of a project, such as its schedule, budget, quality, and stakeholders. Understanding the impact is crucial for prioritizing risks and formulating appropriate responses. For instance, if a significant risk has a high impact on the project's overall success, the project manager must give it greater attention and allocate more resources to mitigate it. This ensures that the integrity of the project is maintained and that goals are met effectively. The other options, while related to risk management, do not define 'impact' in the same way. The likelihood of a risk event occurring relates to the probability of the risk happening, while the amount of resources needed for mitigation refers to what is required to handle the risk. The time required for risk assessment pertains to the duration it takes to evaluate risks but does not capture the essence of impact itself.