PMI Risk Management Professional Practice Exam

Which of the following is a prerequisite for performing quantitative risk analysis?

1. The analyst must quantify urgency, bias, and risk tolerance

2. The analyst must have expected monetary values for each risk

3. The analyst must have complete data and definitive estimates

4. The analyst must believe the data is sufficient and accurate

The correct answer is: The analyst must believe the data is sufficient and accurate

The correct answer focuses on the necessity for an analyst to believe that the data being used for quantitative risk analysis is both sufficient and accurate. This belief is essential because quantitative risk analysis relies heavily on numerical data to assess risks and their potential impacts. Having sufficient data ensures that the analysis captures a realistic view of the potential risks and their likelihoods. If the data is not considered sufficient, the outcomes derived from the analysis could be misleading, thus impacting decision-making processes. Similarly, accuracy is vital because even sufficient data can lead to erroneous conclusions if the numbers are incorrect. In essence, confidence in the data's sufficiency and accuracy underpins the integrity of the entire quantitative risk analysis process, making it a foundational prerequisite. Without this belief, the ensuing analysis may lack credibility and fail to produce reliable results.