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What is a probability-impact matrix in risk management?

A probability-impact matrix plots risks on a grid based on their likelihood and impact scores (typically 1-5). Risks in the high-probability, high-impact corner (red zone) are the highest priority. It is the core tool for qualitative risk analysis.

What are the five risk response strategies in PMP?

The five strategies are: Avoid (eliminate the threat), Mitigate (reduce probability or impact), Transfer (shift impact to a third party, e.g., insurance), Accept (acknowledge and set aside reserves), and Escalate (when the risk is beyond the project manager's authority, escalate to the sponsor).

What is the difference between qualitative and quantitative risk analysis?

Qualitative analysis is a fast, subjective prioritization using a probability-impact matrix. Quantitative analysis uses mathematical models (Monte Carlo simulation, decision trees, expected monetary value) to numerically assess risk impact on project objectives.

How often should the risk register be updated?

The risk register should be reviewed and updated regularly — at minimum monthly, and at every major project milestone. New risks are identified continuously, and existing risks may change in probability or impact as the project progresses.

Predictive · PMP Scenario

Building a Risk Register and Qualitative Risk Analysis for PMP

Scenario

You are managing a $5M infrastructure project. In the first month, you identify 40 potential risks. The project sponsor wants a 'top 10 risks' list for the steering committee. Your team lead suggests simply ranking by likelihood. How should you conduct qualitative risk analysis and present it to the steering committee?

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