PMI Risk Management Professional Practice Exam

Which risk management strategy involves recognizing risks and determining their impact on project objectives?

1. Risk identification

2. Risk analysis

3. Risk monitoring

4. Risk mitigation

The correct answer is: Risk analysis

The strategy that involves recognizing risks and determining their impact on project objectives is specifically risk analysis. This process follows risk identification, where potential risks are first recognized. During risk analysis, the identified risks are assessed in terms of their likelihood of occurrence and the significance of their impact on the project's objectives. This assessment helps project managers prioritize risks based on their potential effects and develop appropriate response strategies. In risk analysis, techniques such as qualitative and quantitative analysis are utilized to evaluate the risks more thoroughly. This step is crucial because understanding the implications of risks allows teams to make informed decisions about how to manage and mitigate them effectively. By assessing the nature and extent of risks, project managers can ensure that they are prepared to handle potential disruptions, thereby safeguarding the project's success.